Determining the Beginning Merchandise Inventory

Information retrieved from the books of Gaudie Gallardo Pharmacy:

Cost of Goods Sold ----------------------- P 836,000

Transportation In------------------------------ 20,000

Merchandise Inventory, 1/31/2020-------- 180,000

Purchases Discounts------------------------- 18,000

Purchases Returns and Allowances--------- 9,000

Purchases ------------------------------------ 900,000

Required:

a)Compute the merchandise inventory as at Jan. 1, 2020.

b)Prepare the cost of goods sold section of the income statement of Gaudie Gallardo Pharmacy.