You were assigned to test the reasonableness of the inventory account balance as reported by your client, HAPPY LANG Company. The information is made available by the company accountant: Cost Retail Beginning Balance 598,400 1,500,000 Purchases 3,048,400 5,500,000 Freight In 80,000 Purchase Returns 140,000 180,000 Mark Ups 600,000 Mark Up Cancellation 100,000 Markdown 1,300,000 Markdown Cancellation 385,000 Sales 4,470,000 Sales Returns 150,000 Sales Discount 200,000 Employee Discount 400,000 Ending inventory as a result of the physical count conducted on December 31, was at P649,600