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Determine the gross purchases for the year

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Reference no: EM133052643

Question - COOL Company has apprehensions of possible pilferage in its stock of merchandise at December 31, 2019. The following data were available:

12/31/2018 12/31/2019

Physical inventory at cost 600,000 1,000,000

Sales 4,000,000

Cost of sales 2,400,000

Accounts receivable - trade 1,200,000 1,350,000

Accounts payable - trade 1,500,000 1,850,000

In 2019, accounts written off amounted to P100,000. Sales returns with credit memo amounted to P150,000 and purchase returns, P50,000.

Cash receipts from customers after P200,000 discounts totaled P6,000,000 while cash payments to trade creditors amounted to P4,000,000 after discounts of P300,000.

Cash paid to customers for goods returned was P50,000. On this transaction, accounts receivable was debited.

Required -

1. Under accrual basis, determine the gross sales for the year 2019?

2. Under accrual basis, determine the gross purchases for the year 2019?

Reference no: EM133052643

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