Mae Co.'s accrual basis profit is computed as follows:

Sales 2,500,000 Cost of Sales: Inventory, January 1 600,000 Net Purchases 1,400,000 Goods Available for Sale 2,000,000 Inventory, Dec ember 31 (4 00,000) (1,600,000) Gross Prot 900,000 Other income 100,000 Operating expenses (700,000) Prot for the year 300,000 Additional information: I Operating expenses include depreciation ofPT0,000. I Other income includes interest income ofP30,000, P10,000 of which pertains to amortization of discount on investment in bonds. I Accounts receivable decreased by P100,000,'. prepaid expenses increased by P50,000,'. accrued expenses increased by P20,000; and accounts payable decreased by P60,000