Problem $4-24($Static$)$ Prepare an income statement and balance sheet from transaction data LO $4-1$

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

a$.$ Issued $800,000$ shares of $$5-$par$-$value common stock for $$400,000$ in cash.

b$.$ Borrowed $$200,000$ from Oglesby National Bank and signed a $8\%$ note due in three years.

c$.$ Incurred and paid $$160,000$ in salaries for the year.

d$.$ Purchased $$301,000$ of merchandise inventory on account during the year.

e$.$ Sold inventory costing $$205,000$ for a total of $$250,000,$ all on credit.

f$.$ Paid rent of $$44,000$ on the sales facilities during the first $11$ months of the year.

g$.$ Purchased $$60,000$ of store equipment, paying $$18,000$ in cash and agreeing to pay the difference within $90$ days.

h$.$ Paid the entire $$42,000$ owed for store equipment and $$227,000$ of the amount due to suppliers for credit purchases previously

recorded.

i$.$ Incurred and paid utilities expense of $$15,000$ during the year.

j$.$ Collected $$221,000$ in cash from customers during the year for credit sales previously recorded.

k$.$ At year$-$end, accrued $$16,000$ of interest on the note due to Oglesby National Bank.

At year$-$end, accrued $$4,000$ of past$-$due December rent on the sales facilities.

Required:

a$.$ Prepare an income statement $($ignoring income taxes$)$ for Kissick Company'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.$)$ Reminder: Increases to expenses should be entered as negative numbers to show the impact on net income. See Exhibit

$4\mathrm{.}3.$

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Required A$1$

Prepare an income statement $($ignoring income taxes$)$ for Kissick Company's first year of operations 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.$)$

Reminder: Increases to expenses should be entered as negative numbers to show the impact on net income. See Exhibit $4\mathrm{.}3.$