NO. 3 In the audit of the books of Greenwich Company for the year 2020, the following items and information appeared in the Production Machines account of the auditee: Date 2020 Particulars Debit Credit Jan. 01 Balance-Machines 1, 2, 3, and 4 at P90,000 each P 360,000 Aug 31 Machine 5 198,000 Machine 1 P 3,000 Sept 30 Machine 6 Dec 01 Dec 01 Machines 7 and 8 at P216,000 each 96,000 432,000 Machine 2 31 Balance 21,000 1,062,000 P1,086,000 P1,086,000 The Accumulated Depreciation account contained no entries for the year 2020. The balance on January 1, 2020 per your audit, was as follows: Machine 1 Machine 2 Machine 3 P 84,375 39,375 33,750 Machine 4 Total 22,500 P 180,000 Based on your further inquiry and verification, you noted the following: 1. Machine 5 was purchased for cash; it replaced Machine 1, which was sold on this date for P3,000. 2. Machine 2 was destroyed by the thickness of engine oil used leading to explosion on December 1, 2020. Insurance of P21,000 was recovered. Machine 7 was to replace Machine 2. 3. Machine 3 was traded in for Machine 6 at an allowance of P12,000; the difference was paid in cash and charged to Production Machine account. 4. Depreciation rate is recognized at 25% per annum. REQUIRED: Determine the adjusted balance of the Production Machine as of December 31, 2020 and Depreciation Expense for the year 2020