Exercise 5-7 The beginning and ending balances in each of the balance sheet accounts of the Mexico Company are as follows: Dec. 31, 2019 Dec. 31, 2020 Cash P260,000 P100,000 Accounts receivable 180,000 360,000 Inventory 400,000 460,000 Prepaid insurance 50,000 30,000 Total current assets P890,000 P950,000 Land P1,200,000 P1,500,000 Plant & equipment 1,000,000 1.400.000 Accumulated depreciation (400,000) (500.000) Total non-current assets P1,800,000 P2.400.000 Total assets P3,350,000 Accounts payable Accrued operating expenses Interest payable Income taxes payable Total current liabilities Bonds payable Common stock Retained earnings P2,690,000 ======= P 300,000 200,000 20,000 122,000 P 642.000 600,000 800.000 648,000 P 260,000 132,000 30,000 150.000 P 572,000 700,000 1,100,000 978.009 Total liabilities & equity P2,690,000 P3,350,000 The forecast income statement for the Mexico Company for 2020 is presented below: Sales Cost of sales Gross profit Operating expenses Income before interest & tax Interest expense Income before tax income tax Net income P2,500,000 1,400,000 P1,100,000 300,000 P 800,000 50,000 P750,000 300,000 P450,000 REQUIRED: 1. Prepare a forecast cash flow statement for 2020