During December of the current year, an entity sold 50,000 units at P150 per unit. The cost for each unit is P100. The entity granted the customers a right to return within 60 days if not satisfied and will receive either a full refund if cash was already paid or a full credit for the amount owed to the entity.

It is estimated that 4% of the units sold will be returned within the 60-day period. The entity used the perpetual method.

1. What amount of sales revenue should be reported for the month of December? a. 7,500,000 b. 7,200,000 c. 5,000,000 d. 0

2. What amount should be recognized as refund liability at year-end? a. 300,000 b. 200,000 c. 100,000 d. 0

3. What amount shoud be reported as cost of goods for December? a. 5,000,000 b. 4,800,000 c. 4,700,000 d. 5,200,000

4. What is included in the journal entry to record the sales for December? a. Credit sales P7,200,000 b. Credit refund liability P300,000 c. Debit cost of good sold P4,800,000 d. All of these are included in the journal entry