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Based on a physical inventory taken on December 31, 2020, ABC Co. determined its chocolate...

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Accounting

Based on a physical inventory taken on December 31, 2020, ABC Co. determined its chocolate inventory on a FIFO basis at P2,600,000 with a replacement cost of P2,500,000. ABC Co. estimated that, after further processing costs of P1,200,000, the chocolate could be sold as finished candy bars for P4,000,000. The normal profit margin is 10% of sales. Under the lower of cost or net realizable value, what amount should ABC Co. report a chocolate inventory in its December 31, 2020 statement of financial position?

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