Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Below are the transactions and adjustments that occurred during the first year of operations at Kissick Co Issued 192,000 shares of $5-par-value common stock for

Below are the transactions and adjustments that occurred during the first year of operations at Kissick Co

Issued 192,000 shares of $5-par-value common stock for $960,000 in cash.

Borrowed $520,000 from Oglesby National Bank and signed a 11% note due in three years.

Incurred and paid $410,000 in salaries for the year.

Purchased $710,000 of merchandise inventory on account during the year.

Sold inventory costing $590,000 for a total of $910,000, all on credit.

Paid rent of $220,000 on the sales facilities during the first 11 months of the year.

Purchased $170,000 of store equipment, paying $53,000 in cash and agreeing to pay the difference within 90 days.

Paid the entire $117,000 owed for store equipment and $630,000 of the amount due to suppliers for credit purchases previously recorded.

Incurred and paid utilities expense of $37,000 during the year.

Collected $845,000 in cash from customers during the year for credit sales previously recorded.

At year-end, accrued $57,200 of interest on the note due to Oglesby National Bank.

At year-end, accrued $20,000 of past-due December rent on the sales facilities.

Required: a. Prepare an income statement (ignoring income taxes) for Kissick Co.'s first year of operations and a balance sheet as of the end of the year. (Hint: You may find it helpful to prepare T-accounts for each account affected by the transactions.) (Amounts to be deducted and net loss should be indicated with minus sign.)

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

SAP S/4HANA Financial Accounting Certification Guide

Authors: Stefanos Pougkas

1st Edition

1493215507, 978-1493215508

More Books

Students also viewed these Accounting questions

Question

4. What are the current trends in computer software platforms?

Answered: 1 week ago