Problem 4

On July 21, 2021, there was a fire that destroyed PIRENA Company's warehouse and inventory records. The following information about sales and salvaged documents revealed the following:

• Inventory, Jan. 1 - P485,000
• Purchases - January to July 21
  • Cost of purchases - P1,560,300
  • Freight-in -P39,700
  • Purchase returns - P80,000
  • Purchase discounts - P20,000
• Sales - January to July 21
  • Sales - P2,000,000
  • Sales discounts - P500,000
  • Sales discounts forfeited - P20,000
• The gross profit is 20% for the last five years.

The company also provided information:

• Goods out on consignment, at cost - P30,000
• Goods purchased still in transit, FOB destination - P25,000
• Cost of undamaged goods at selling price - P100,000

How much is the estimated cost of goods sold?

How much is the estimated inventory losses?