Journalize all the following transactions and set up the Income Statement. Also, provide all the necessary closing entries.

The beginning balances of the inventories of Cycle Mfg. Corp. are as follows:

Raw Materials P 15,000

Work-in-process 21,000

Finished Goods 18,000

Transactions & events for the fiscal year ended Dec. 31, 1998 are summarized as follows:

1. Raw Materials purchased - P220,000; 25% was on account
2. Direct labor (paid in cash) applied to convert raw materials to finished goods - P72,000
3. Other wage expenses paid in cash - P75,000. 1/3 of this was used to pay for the salaries of production personnel, inspectors & supervisors. The rest was used to pay for the wages of administrative officers.
4. Utilities expense incurred for factory use all paid in cash - P60,000
5. Supplies requisitioned during the year - P60,000. 1/3 of this was used in the factory.
6. Purchase discounts availed of, P15,000, deductible from A/P.
7. Repairs & maintenance expense incurred (all paid in cash) for: a) factory equipment P25,000 b) office equipment 12,000
8. Depreciation Expense of: a) factory building - P20,000 b) factory equipment -25,000 c) office building -8,000
9. Bad Debt expense is estimated to be 2% of total credit sales. Total sales revenue generated for the year is P600,000, half on account and half paid in cash.
10. Purchase Returns amounted to P7,500, (deductible from accounts payable).
11. Ending balances:

Raw Materials P 18,000

W/P 25,000

Finished Goods 20,000