Problem 2 An analysis of the incomplete records of Munchlax Company produced the following information applicable to 2020: Increases Cash P420,000 Accounts receivable 140.000 Accounts payable 40.000 Prepaid insurance 20.000 Decreases Inventory P100.000 Equipment 10.000 Notes receivable 60.000 Salaries payable 30.000 Summary of cash transactions Receipts: Cash sales P 300.000 Collections on accounts receivable 3.000.000 Collections on notes receivable 240,000 Interest on notes receivable 20.000 Purchase returns and allowances (total purchase returns and allowances, P80,000) 50,000 Page 1 of 2 BSA 3201 -A&A: Concepts and Applications 1 8: 2 LECOZF - Single-Entg Accounting Disbursements: Cash purchases P100.000 Payments on accounts payable P1.650.000 Sales returns and allowances (total sales returns and allowances. P120000) 40.000 Insurance 70.000 Salaries 1.000.000 Equipment 80.000 Other expenses 150.000 Dividends 100.000 Required: a) Income statement for the year ended December 31, 2020. b) Proof of the net income or loss using the single-entry method