Reference no: EM132949897

GG company was organized on January 1, 2020, 50,000 shares of P50 par value common stock being issued in exchange for property, plant and equipment valued at P3,000,000 and cash of P1,000,000. The following data summarize activities for the year.

1. Net income for the current year was P1,000,000
2. Raw materials on hand on Dec. 31 were equal 25% of raw material purchased.
3. Manufacturing cost were distributed as follows:
Materials used 50%
Direct labor 25%
Factory overhead 25% (includes depreciation of building, P100,000)
4. Goods in process remaining in the factory on Dec. 31 were equal to 33 1/3% of the goods finished and transferred to stock.
5. Finished goods remaining in stock were equal to 25% of the cost of goods sold.
6. Expenses were 15% of sales.
7. Cost of goods sold was 120% of the expenses total.
8. Eight percent of sales were collected. The balance was considered collectible.
9. Seventy-five percent of the raw materials purchased were paid for. There were no expense accruals or prepayments at the end of the year.

Required

Question 1: Prepare an income statement for the year ended December 31, 2020.

Question 2: Prepare a statement of financial position on December 31, 2020.