On January 1, 2020, AMS Company (trading firm; buying and selling of laptop computers) was established with a capitalization of P1,000,000 (equity P800,000; loan from a friend P200,000). Of the P1 million capitalization, the company bought 10 laptops (high-end merchandise) each costing P50,000 (cash purchases). In addition, it acquired a new transportation equipment worth P250,000 (5 years life, straight line depreciation, no salvage value). The rest of the funds were in the form of cash. On December 27, 2020, the company was able to sell 8 laptops at a price of P100,000 each. Transaction terms were 50% cash, and 50% credit (to be received one month later. Aside from annual depreciation of P50,000, the company spent P100,000 throughout the year for marketing expenses and another P100,000 as administrative expenses. Taxes were fully paid in cash for the entire year amounted to 50% of operating income. No other expenses were incurred for the year. (note: all expenses were paid on cash basis) On December 30, 2020, ten (10) additional laptops were purchased on credit (payable after one month from the date of purchase).

Required:

1. Prepare the Balance Sheet as of January 1, 2020.

2. Prepare the Income Statement for the year ended December 31, 2020.

3. Prepare the Balance Sheet as of December 31, 2020.