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Question - BR Company uses a perpetual inventory system and follows GAAP in preparing its external financial statements. At the end of 2019, the balance in the inventory account was P360,000 and P30,000 of those goods included in ending inventory were purchased FOB shipping point and did not arrive until 2020.
Purchases in 2020 were P3,000,000. The perpetual inventory records showed an ending inventory of P420,000 for 2020. A physical count of the goods on hand at the end of 2020 showed an inventory of P380,000. Inventory shortages are included in cost of goods sold.
What should the company report on its 2020 income statement for cost of goods sold?
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