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Below are the transactions and adjustments that occurred during the first year of operations at Kissick Co Issued 196,000 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

  1. Issued 196,000 shares of $5-par-value common stock for $980,000 in cash.

  2. Borrowed $540,000 from Oglesby National Bank and signed a 10% note due in three years.

  3. Incurred and paid $390,000 in salaries for the year.

  4. Purchased $730,000 of merchandise inventory on account during the year.

  5. Sold inventory costing $590,000 for a total of $900,000, all on credit.

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

  7. Purchased $160,000 of store equipment, paying $53,000 in cash and agreeing to pay the difference within 90 days.

  8. Paid the entire $107,000 owed for store equipment and $600,000 of the amount due to suppliers for credit purchases previously recorded.

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

  10. Collected $855,000 in cash from customers during the year for credit sales previously recorded.

  11. At year-end, accrued $54,000 of interest on the note due to Oglesby National Bank.

  12. 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.)

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