For the Year Ended December 31, 2X20 Sales revenue P6,583,000 Cost of goods sold P2,810,000 Operating expenses (excluding depreciation) 2,086,000 Depreciation expense 880,000 Loss on disposal of plant assets 2
Dela Rosa Company Company
The income statement for the year ended December 31, 2020, for Dela Rosa Company Company contains the following condensed information.
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Dela Rosa Company Company |
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Income Statement |
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For the Year Ended December 31, 2X20 |
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Sales revenue |
P6,583,000 |
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Cost of goods sold |
P2,810,000 |
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Operating expenses (excluding |
2,086,000 |
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Depreciation expense |
880,000 |
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Loss on disposal of plant assets |
24,000 |
5,800,000 |
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Income before income taxes |
783,000 |
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Income tax expense |
353,000 |
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Net income |
P430,000 |
The P24,000 loss resulted from selling equipment for P270,000 cash. The equipment was purchased at a cost of P750,000. The following balances are reported on Delar Rosa’s comparative
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Dela Rosa Company Company |
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Comparative Balance Sheets |
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2X20 |
2X19 |
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Cash |
P672,000 |
P130,000 |
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775,000 |
610,000 |
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Inventory |
834,000 |
867,000 |
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Accounts payable |
521,000 |
501,000 |
Income tax expense of P353,000 represents the amount paid in 2020. Dividends declared and paid in 2020 totaled P200,000.
Required:
Prepare the statement of
1. Direct method
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