Quality Corporation which uses the periodic inventory system, showed the following information at the end of

the year:

Beginning inventory, P 215,000

Purchases, P 420.000

Sales, P 1,020,000

Sales returns, P 270,000

Ending inventory. P 220.000

'A mistake was made in taking the physical inventory and the beginning inventory should have been P 180,000.

QUESTION:

What is the effect of the error on gross profit?

a. increase in gross profit by P 40,000

b. decrease in gross profit by P 35,000

c. decrease in gross profit by P 40,000

d. increase in gross profit by P 35,000

. . Quality Corporation which uses the periodic inventory system, showed the following information at the end of the year Beginning inventory, P 215,000 Purchases, P 420,000 Sales, P 1.020,000 Sales returns, P 270,000 Ending inventory. P 220.000 A mistake was made in taking the physical inventory and the beginning inventory should have been P 180,000. QUESTION: What is the effect of the error on gross profit? . Increase in gross profit by P40,000 decrease in gross profit by P35,000 O decrease in gross profit by P 40,000 O increase in gross proht by P 35.000