Following 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 11% 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 $570,000 for a total of $910,000, all on credit.
6. Paid rent of $220,000 on the sales facilities during the first 11 months of the year.
7. Purchased $170,000 of store equipment, paying $52,000 in cash and agreeing to pay the difference within 90 days.
8. Paid the entire $118,000 owed for store equipment and $630,000 of the amount due to suppliers for credit purchases previously recorded.
9. Incurred and paid utilities expense of $34,000 during the year.
10. Collected $845,000 in cash from customers during the year for credit sales previously recorded.
11. At year-end, accrued $59,400 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 a T-account for the Cash account since it is affected by most of the transactions.)

KISSICK CO. Income Statement Sales 570,000 Cost of goods sold (570,000) Gross profit Utilities expense Rent expense Salaries expense (570,000) Loss from operations Interest expense (570,000) Net loss KISSICK CO. Balance Sheet Assets: Cash Accounts receivable Merchandise inventory Total current assets Equipment Total assets 24 Liabilities: Accounts payable Interest payable Rent payable Total current liabilities Notes payable Total liabilities 24 Stockholders' Equity: Common stock Deficit/Net loss Total Stockholders' equity Total liabilities and stockholders' equity 24 %24