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The balance sheet of Ayala Trading as of December 31, 2019 shows the following account balances: Cash 93,000 Accounts receivable 165,000 Allowance for doubtful accounts

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The balance sheet of Ayala Trading as of December 31, 2019 shows the following account balances: Cash 93,000 Accounts receivable 165,000 Allowance for doubtful accounts 2,000 Notes receivable (trade) 45,000 Merchandise inventory 105,000 Prepaid operating expenses 6,000 Accrued commission income 12,000 Furniture and equipment 240,000 Allowance for depreciation - F/E 40,000 Accounts payable 93,000 Accrued operating expenses 9,700 Unearned interest income 300 Ordinary share capital 500,000 Cash transactions during 2020 are summarized below: Cash sales 351,100 Collections from customers after deducting P3,600 sales discounts 623,000 Collections on trade notes receivable 60,000 Receipt of cash upon issuance of a 60-day, 12% note to the bank 30,000 Collections of interest income 100 Collections of commission income 45,000 Refund for purchase returns 2,000 Cash purchases 103,000 Payments to creditors after deducting P5,100 purchase discounts 506,000 Acquisition of new furniture 6.000 Payments of operating expenses 275,000 Other non-cash transactions during 2020 are as follows: Worthless accounts receivable written off against the existing allowance 1,500 Sales returns and allowances credited against the accounts receivable 2,000 Purchase returns and allowances debited against accounts payable 1,000 Additional information gathered from vendors records and other business documents reveals the assets and liabilities of Ayala Trading as of December 31, 2020: Cash Accounts receivable 155,000 Allowance for doubtful accounts 2,500 Merchandise inventory 124,000 Prepaid operating expenses 6,800 Accrued commission income 5,000 Furniture and equipment 246,000 Allowance for depreciation - F/E 65,000 Accounts payable 86,000 Notes payable 30,000 Accrued interest expense 200 Accrued operating expense 8,500 Requirements: 1. Working paper for the preparation of financial statements for the year ended December 31, 2020. 2. Income statement, with supporting schedules. 3. Statement of assets and liabilities as of December 31, 2020

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