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

Issued 194,000 shares of $5-par-value common stock for $970,000 in cash.

Borrowed $540,000 from Oglesby National Bank and signed a 11% note due in three years.

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

Purchased $700,000 of merchandise inventory on account during the year.

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

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

Purchased $150,000 of store equipment, paying $53,000 in cash and agreeing to pay the difference within 90 days.

Paid the entire $97,000 owed for store equipment and $620,000 of the amount due to suppliers for credit purchases previously recorded.

Incurred and paid utilities expense of $37,000 during the year. Collected $855,000 in cash from customers during the year for credit sales previously recorded.

At year-end, accrued $59,400 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 a T-account for the Cash account since it is affected by most of the transactions.)