Reference no: EM132898266

Problem - Berna Company was organized on January 1, 2020, 25,000 ordinary shares of P100 par value being issued in exchange for property, plant and equipment valued at P3,000,000 and cash of P100,000. The following data summarize activities for the year.

1. Net income for the current year was P 1,000,000.

2. Raw materials on hand on December 31 were equal to 25% of raw materials purchased.

3. Manufacturing costs were distributed as follows: Materials used 50% Direct labor 30% Factory overhead 20% (includes depreciation of building, P100,000)

4. Goods in process remaining in the factory on December 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 30% of sales.

7. Cost of goods sold was 150% of the expenses total.

8. Ninety 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 -

a. Prepare an income statement for the year ended December 31, 2020.

b. Prepare a statement of financial position on December 31, 2020.