Reference no: EM133029622

Problem - BCD Superstore - After a year of operations, Mr. Terence Hill wanted to analyze the performance of his supermarket. He wanted to know where the supermarket stood as of September 30, 1983 and what its future prospects were.

BCD Superstore (BS) was a supermarket organized by Mr. Hill on October 1, 1982. The following list summarizes the transactions for the first year of business which ended September 30, 1983.

(1) For its initial capital, Mr. Hill took out a P600,000 mortgage on his own land. He invested P500,000 of this in common stock of the supermarket.

(2) Mr. Bud Spencer, Mr. Hill's close friend and neighbor, invested P150,000 in cash, receiving stocks in return.

(3) A building and equipment were brought for P90,000, P30,000 of which was paid in cash. The balance was paid in cash by borrowing from a bank. This amount was paid at the end of the fiscal year together with a 10% interest.

(4) Merchandise costing P221,250 was bought on account.

(5) Merchandise costing P189,100 was sold for P437,250. P125,500 was received in cash and the balance on credit, P1,000 of which was deemed to be uncollectible.

(6) P42,450 cash was paid as employees' wages.

(7) BS was billed P15,750 for other expenses, paid for in cash.

(8) BS received P1,500 cash for the rent of the storage space in the supermarket left during the fiscal year.

(9) BS suffered an uninsured loss by fire of merchandise costing P10,000 and equipment costing P5,200. All losses were charged against income.

(10) Accounts payable of P197,500 was paid in cash.

Required - Prepare a balance sheet and an income statement for BCD Superstore.