The adjusted trial balance of Nagaraya Co. as of December 31, 2022 is shown below.

Debits Credits
Cash on hand 62,350
Cash in bank - BPI (Savings 1,720,500
Cash in bank - BPI (Current) 1,890,234
Cash in bank - BDO (Current) 567,891
Accounts receivable 8,341,689
Allowance for doubtful accounts 347,182
Advances to employees 57,610
Loans receivable (due in 2025) 9,827,341
Unearned interest income 1,234,819
Raw materials inventory 1,237,398
Work in process inventory 7,987,908
Finished goods inventory 12,892,309
Prepaid income tax 234,125
Prepaid supplies 890,239
Advances to suppliers 34,981
Held for trading securities 2,834,079
Investment in equity securities - FVOCI 987,234
Investment in associate 1,290,347
Interest receivable (due on March 1, 2023) 946,013
Land 8,980,751
Building 3,419,877
Accumulated Depreciation - Bldg. 712,930
Equipment 917,387
Accumulated Depreciation - Eqpt. 234,125
Accounts payable 9,071,239
Accrued liabilities 889,712
Income tax payable 721,346
Deferred tax asset 1,092,387
Deferred tax liability 918,732
Loans payable (due in 2023) 8,000,000
Discount on loan payable 746,252
Interest payable (due on July 1, 2023) 341,782
Deferred credits 712,788
Provision for warranty obligations 432,187
Ordinary share capital 20,000,000
Share premium 6,000,000
Retained earnings - unrestricted 15,144,664
Retained earnings - appropriated 1,200,000
Revaluation surplus 873,984
Unrealized gains on equity securities - FVOCI 123,412
Totals 66,958,902 66,958,902

Prepare the statement of financial position of Nagaraya Co.

hown below.

ASSETS LIABILITIES & EQUITY

Current Assets Current Liabilities
Cash and Cash Equivalents 4,240,975 Trade and Other Payables
Trade and Other Receivables 9,033,111 Loans Payable - net
Inventories 22,117,615 Income tax payable
Held for Trading Securities 2,834,079 Provision for warranty obligations
Prepaid income tax 234,125 Total Current Liabilities
Prepaid supplies 890,239
Total Current Assets 39,350,144

Noncurrent Assets Noncurrent Liabilities

Loans Receivable - net 8,592,522 Deferred tax liability
Investment in equity securities - FVOCI 987,234 Deferred credits
Investment in associate 1,290,347
PPE 12,370,960
Deferred tax asset 1,092,387
Total Noncurrent Asset 24,333,450 Total Noncurrent Liabilities

TOTAL LIABILITIES

TOTAL ASSETS 63,683,594 TOTAL LIABS. & EQUITY

 EQUITY

10,302,733 Ordinary share capital 20,000,000

7,253,748 Share premium 6,000,000
721,346 Retained earnings 16,344,664
432,187 Other components of equity 997,396
18,710,014

918,732
712,788

1,631,520

20,341,534 TOTAL EQUITY 43,342,060

63,683,594
The records of Nagaraya Co. on December 31, 2022 show the following information

Debits Credits
Sales 22,000,000
Beginning inventory 1,700,000
Purchases 5,600,000
Purchase returns 500,000
Freight in 400,000
Sales of sales personnel 670,000
Interest expense 340,000
Advertising expense 320,000
Research and development expense 180,000
Directors' remuneration 2,000,000
Salaries of administrative personnel 520,000
Rent expense 280,000
Depreciation expense 160,000
Commission expense 1,100,000
Impairment loss on financial assets 190,000
Insurance expense 50,000
Income tax expense 2,000,000
Unrealized gain on equity securities - FVOCI 200,000
Gain on change in fair value - Cash flow hedge 30,000
Totals 15,510,000 22,730,000

Additional Information
1. Ending inventory amounts to P1,200,000.
2. One-half of the rent expense pertains to the sales deparment.
3. The impairment loss on financial assets pertains to impairment of receivables recognized on contracts with customers.
4. The items of other comprehensive income are net of tax
5. The gain on change in fair value on the cash flow hedge represents the effective portion.

Prepare the statement of comprehensive income using the single statement presentation and the function of expense method.
 Sales 22,000,000
COGS 6,000,000
Gross Profit 16,000,000
Distribution costs 2230000
Administrative expenses 3050000
Impairment loss 190,000
Finance cost 340,000 5810000
Profit Before Tax 10190000
Income Tax Expense 2,000,000
Profit for the Year 8190000

OCI
Investment in securities 200,000
Cashflow hedge 30,000
TOTAL COMPRE. INCOME 8420000

ed on contracts with customers.

and the function of expense method.

The following is a comparative balance sheet for Nagaraya Co. for years 2021 and 2022:

Nagaraya Co.
Comparative Balance Sheet
December 31, 2022 and 2021

Assets 2,022 2,021

Cash 43,000 240,000
Accounts receivable 390,000 210,000
Inventory 360,000 450,000
Long-term investment 0 120,000
Total assets 793,000 1,020,000

Accounts payable 150,000 240,000

Operating expenses payable 48,000 30,000
Bonds payable 140,000 200,000
Common stock 250,000 250,000
Retained earnings 205,000 300,000
Total liabilities and equities 793,000 1,020,000

The income statement for the year ended December 31, 2022, follows:

Nagaraya Co.
Income Statement
For the Year Ended December 31, 2022

Sales 1,120,000
Cost of goods sold:
Beginning inventory, Jan. 1, 2022 450,000
Purchases 660,000
Cost of goods available for sale 1,110,000
Less: Ending inventory, Dec. 31, 2022 360,000 750,000
Gross profit on sales 370,000
Operating expenses 360,000
Operating income 10,000
Other revenues and expenses:
Loss on sale of long-term investment (15,000)
Net loss (5,000)

After paying cash dividends, the decrease in retained earnings totaled P95,000. Management is alarmed by the shrinkage in th

Prepare a statement of cash flows for 2022.

 Cash flows from Operating Activities
Net income 90,000
Increase in AR -180000
Decrease in Inventory 90000

ent is alarmed by the shrinkage in the company's cash position during 2022.