Reference no: EM133132295

Question - Delone Fotoe opened a photocopying center on October 1, 2020 called Copy Central Company. Her cash receipts and disbursements record as of December 31, 2020 is as follows:

Cash Receipts:

Delone's investment P200,000

Customer payments 420,000

Bank loan 300,000

Cash Disbursements

Photocopying Machines P130,000

Printing Supplies 185,000

Rent for Office space 117,000

Paper Supplies 100,000

Wages to employee 80,000

Insurance 60,000

Utility 32,000

Miscellaneous Expenses 24,000

Cash balance

Additional Information:

1. Photocopies worth P45,000 have not yet been picked up by clients and remain unpaid by Dec. 31.

2. Aside from cash, Delone also invested an old photocopy machine worth P90,000 on Oct. 1, with expected useful life of 5 years and zero scrap value. The new machine, bought for P250,000 on Oct. 24, has estimated useful life of 10 years and P10,000 scrap value.

3. The utility bill for December of P13,500 remains unpaid and will be paid in January 2021.

4. By December 31, the remaining unused supplies are as follows:

Paper Supplies P 35,000

Printing Supplies P 110,000

1. P40,000 worth of additional Paper Supplies arrived on December 31 and was not counted in computing unused Paper Supplies in Item (d). These supplies will be paid 30 days later.

2. The insurance payment is for a one-year policy effective November 1, 2020.

3. Delone paid rent for the months of October 2020 until June 2021.

4. Delone borrowed from the bank on December 1, 2020 at an interest of 12% per annum based on the remaining balance. Bank loan is payable on an equal 3 years installment of P100,000 per year beginning December 1, 2021. Both principal and interest on the loan are payable at the same time.

5. Wages of P 14,500 for services rendered in December will be released on January 5, 2021.

6. Delone's salary of P15,000 cash was added to Miscellaneous Expense.

Required - Prepare the income statement and classified balance sheet (in report format) for Copy Central Company for the quarter ended December 31, 2020. Assume that the company is preparing financial statements for the first time on December 31, 2020 and that no prior adjustments were made to any account.