Problem 3 Moltres company provided the following information for the preparation of financial statements for 2020: Balances - January 1, 2020 Cash P 400.000 Accounts receivable 120.000 Inventory 230,000 Prepaid insurance 35,000 Land 500.000 Building 2,000,000 Accumulated depreciation - building 700,000 Equipment 800,000 Accumulated depreciation - equipment 240.000 Accounts payable 170,000 Accrued salaries 20,000 Advances from customers 90,000 Share capital 2,500,000 Retained earnings 365,000 Relevant information are as follows: 1) Dividends of 5% were declared on June 30 and on December 31, 2020. 2) All depreciable assets should be depreciated at 10% per year. 3) Doubtful accounts are estimated to be 5% of year-end accounts receivable. The accounts receivable totaled P200,000 on December 31, 2020. 4) Cash receipts for 2020 are summarized as follows: Advances from customers P70,000 Cash sales and collections from accounts receivable 2,960,000 Sales of equipment on December 31, 2020 costing P50,000 on which P30,000 of depreciation had been accumulated 45,000 P3,075,000 5) Cash disbursements for 2020 are summarized as follows: Insurance premium 80,000 Purchase of equipment on October 1 200,000 Cash purchases and payments on accounts payable 1,640,000 Salaries 390,000 Dividends paid 125,000 Other expenses 135,000 P2,570,000 6) Additional data on December 31, 2020 are as follows: Inventory P245,000 Prepaid insurance 25,000 Advances from customers 50,000 Accrued salaries 30,000 Accounts payable 100,000 Required: a) Income statement for the year ended December 31, 2020. b) Statement of financial position as at December 31, 2020