Given the data below, reconstruct the balance sheet and the income statement of Fay Co. for the year 2020:

FAY COMPANY

Balance Sheet

December 31, 2020

ASSETS LIABILITIES & EQUITY

Current Assets Current Liabilities

Cash P Current liabilities P

Marketable securities 50,000 Long-term Liabilities

Accounts receivable-net Bonds payable 12% ___________

Inventories ___________ Total Liabilities

Total Current Assets P Stockholders Equity

Plant Assets Common stock P

Plant and Equipment-net ___________ Retained earnings _______ __________

Total Assets P Total Liabilities & Equity P

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FAY COMPANY

Income Statement

For Year ended Dec 31,2020 Additional data:

Net Sales P 1. Operating expenses = 15% of net sales

COGS ___________ 2. Acid test ratio is 1.3 : 1

Gross Margin 525,000 3. Times-interest-earned = 6 times

Operating expenses ____________ 4. Gross margin is 35% of net sales

Operating income (EBIT) 5. DSO = 36 days

Interest expense ____________ 6. Beginning balance of accounts receivable

Net income before taxes(EBT) is P160,000. Use 360 day year.

Income tax 35% ____________ 7. Inventory turnover is 4 times. Beginning

Net Income P inventory is P250,000.