Berna Company was organized on January 1, 2019, 25,000ordinary shares of P100 par value being issued in exchangefor propèrty, plant and equipment valued at P3,000,000 andcash of P1,000,000.The following data summarize activities for the year.1. Net income for the current year was P1,000,000.2. Raw materials on hand on December 31 were equal to25% of raw materials purchased.3. Manufacturing costs were distributed as follows:Materials usedDirect labor50%30%20% (includes depreciation ofbuilding, P100,000)Factory overhead4. Goods in process rem aining in the factory onDecember 31 were equal to 33 1/3% of the goodsfinished and transferred to stock.5. Finished goods remaining in stock were equal to 25% ofthe cost of goods sold.6. Expenses were 30% of sales.7. Cost of goods sold was 150% of the expenses total.8. Ninety percent of sales were collected. The balance wasconsidered collectible.9. Seventy five percent of the raw materials purchased werepaid for. There were no expense accruals or prepaymentsat the end of the year.Required:a. Prepare an income statement for the year endedDecember 31, 2019.b. Prepare a statement of financial position on December31, 2019.

SOLUTION 1- INCOME STATEMENT PARTICULARS…

Berna Company was organized on January 1, 2019, 25,000 ordinary shares of P100 par value being issued in exchange for propèrty, plant and equipment valued at P3,000,000 and cash of P1,000,000. The following data summarize activities for the year.

Berna Company was organized on January 1, 2019, 25,000 ordinary shares of P100 par value being issued in exchange for propèrty, plant and equipment valued at P3,000,000 and cash of P1,000,000. The following data summarize activities for the year.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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