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Aparri Company included the following items in its inventory on December 31, 2005:
Merchandise out on consignment, at sales price, including 25% markup on cost P4,000,000
Goods purchased in transit, FOB destination 2,000,000
Goods held on consignment by Aparri Company 1,000,000
Problem 1: By what amount should the inventory at December 31, 2005 be reduced?
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