On December 31, 2020, a flood at Jamela Company's only warehouse caused severe damage to its entire inventory. Based on recent history, the entity has a gross profit of 25% of sales. The following information is available from the records for the year ended December 31, 2020: Inventory (January 1), 520,000; Purchases, 4,120,000; Purchase returns, 60,000; Sales, 5,600,000; Sales returns, 400,000; Sales allowances, 100,000. A physical inventory disclosed usable damaged goods which can be sold for 100,000. Using the gross profit method, what is the estimated cost of goods sold for the year ended December 31, 2020?

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On December 31, 2020, a flood at 0/3 Jamela Company's only warehouse caused severe damage to its entire inventory. Based on recent history, the entity has a gross profit of 25% of sales. The following information is available from the records for the year ended December 31, 2020: Inventory (January 1), P520,000; Purchases, 24,120,000; Purchase returns, P60,000; Sales, P5,600,000; Sales returns, P400,000; Sales allowances, P100,000. A physical inventory disclosed usable damaged goods which can be sold for P100,000. Using the gross profit method, what is the estimated cost of goods sold for the year ended December 31, 2020? * P3,360,000 P3,830,000 P3,900,000 3,825,000 Correct answer 3,825,000