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Question - Your examination of DEC Company's inventory and related records revealed the following information:
Merchandise inventory January 1, 2020 P 450,000.00
Purchases for the year 2020 3,150,000.00
Sales for the year 2020 4,200,000.00
You conducted a physical on December 31, 2020 and determine P500,000 was in the company's warehouse. The company president suspects some new employees may have pilfered a portion of the merchandise inventory.
REQUIRED - Determine the estimated cost of the missing inventory, assuming DEC's gross profit remained constant at
1. 40% on sales
2. 40% on cost of sales
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