Following are the transactions and adjustments that occurred during the first year of operations at Kissick Co. a. Issued 199,000 shares of $5-par-value common stock for $995,000 in cash. b. Borrowed $530,000 from Oglesby National Bank and signed a 11% note dué in three years. c. Incurred and paid $420,000 in salaries for the year. d. Purchased $730,000 of merchandise inventory on account during the year. e. Sold inventory costing $590,000 for a total of $910,000, all on credit. f. Paid rent of $330,000 on the sales facilities during the first 11 months of the year. g. Purchased $150,000 of store equipment, paying $51,000 in cash and agreeing to pay the difference within 90 days. h. Paid the entire $99,000 owed for store equipment and$600,000 of the amount due to suppliers for credit purchases previously recorded. i. Incurred and paid utilities expense of $35,000 during the year. j. Collected $855,000 in cash from customers during the year for credit sales previously recorded. k. At year-end, accrued $58,300 of interest on the note due to Oglesby National Bank. I. At year-end, accrued $30,000 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.)
Following are the transactions and adjustments that occurred during the first year of operations at Kissick Co. a. Issued 199,000 shares of $5-par-value common stock for $995,000 in cash. b. Borrowed $530,000 from Oglesby National Bank and signed a 11% note dué in three years. c. Incurred and paid $420,000 in salaries for the year. d. Purchased $730,000 of merchandise inventory on account during the year. e. Sold inventory costing $590,000 for a total of $910,000, all on credit. f. Paid rent of $330,000 on the sales facilities during the first 11 months of the year. g. Purchased $150,000 of store equipment, paying $51,000 in cash and agreeing to pay the difference within 90 days. h. Paid the entire $99,000 owed for store equipment and$600,000 of the amount due to suppliers for credit purchases previously recorded. i. Incurred and paid utilities expense of $35,000 during the year. j. Collected $855,000 in cash from customers during the year for credit sales previously recorded. k. At year-end, accrued $58,300 of interest on the note due to Oglesby National Bank. I. At year-end, accrued $30,000 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.)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
hello? I need help please
Transcribed Image Text:Following are the transactions and adjustments that occurred during the first year of operations at Kissick Co.
a. Issued 199,000 shares of $5-par-value common stock for $995,000 in cash.
b. Borrowed $530,000 from Oglesby National Bank and signed a 11% note dué in three years.
c. Incurred and paid $420,000 in salaries for the year.
d. Purchased $730,000 of merchandise inventory on account during the year.
e. Sold inventory costing $590,000 for a total of $910,000, all on credit.
f. Paid rent of $330,000 on the sales facilities during the first 11 months of the year.
g. Purchased $150,000 of store equipment, paying $51,000 in cash and agreeing to pay the difference within 90 days.
h. Paid the entire $99,000 owed for store equipment and $600,000 of the amount due to suppliers for credit purchases previously
recorded..
i. Incurred and paid utilities expense of $35,000 during the year.
j. Collected $855,000 in cash from customers during the year for credit sales previously recorded.
k. At year-end, accrued $58,300 of interest on the note due to Oglesby National Bank.
I. At year-end, accrued $30,000 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.)
Complete this question by entering your answers in the tabs below.
Required A1
Required A2
Prepare an income statement (ignoring income taxes) for Kissick Co.'s first year of operations as of the end of the year. (Hint:
Transcribed Image Text:Required A1
Required A2
Prepare 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.) (Amounts to be deducted and net loss should be indicated with minus sign.)
KISSICK CO.
Balance Sheet
Assets:
Total current assets
Total assets
Liabilities:
Total current liabilities
Total liabilities
< Prev
3 of 3
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 3 steps with 3 images
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education