Problem 4-24 (Algo) 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 194,000 shares of $6-par-value common stock for $1,164,000 in cash. b. Borrowed $510,000 from Oglesby National Bank and signed a 10% note due in three years. c. Incurred and paid $390,000 in salaries for the year. d. Purchased $650,000 of merchandise inventory on account during the year. e. Sold inventory costing $570,000 for a total of $920,000, all on credit. f. Paid rent of $220,000 on the sales facilities during the first 11 months of the year. g. Purchased $170,000 of store equipment, paying $55,000 in cash and agreeing to pay the difference within 90 days. h. Paid the entire $115,000 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 $38,000 during the year. j. Collected $835,000 in cash from customers during the year for credit sales previously recorded. k. At year-end, accrued $51,000 of interest on the note due to Oglesby National Bank. I. 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 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 4.3.
The Effect Of Prepaid Taxes On Assets And Liabilities
Many businesses estimate tax liability and make payments throughout the year (often quarterly). When a company overestimates its tax liability, this results in the business paying a prepaid tax. Prepaid taxes will be reversed within one year but can result in prepaid assets and liabilities.
Final Accounts
Financial accounting is one of the branches of accounting in which the transactions arising in the business over a particular period are recorded.
Ledger Posting
A ledger is an account that provides information on all the transactions that have taken place during a particular period. It is also known as General Ledger. For example, your bank account statement is a general ledger that gives information about the amount paid/debited or received/ credited from your bank account over some time.
Trial Balance and Final Accounts
In accounting we start with recording transaction with journal entries then we make separate ledger account for each type of transaction. It is very necessary to check and verify that the transaction transferred to ledgers from the journal are accurately recorded or not. Trial balance helps in this. Trial balance helps to check the accuracy of posting the ledger accounts. It helps the accountant to assist in preparing final accounts. It also helps the accountant to check whether all the debits and credits of items are recorded and posted accurately. Like in a balance sheet debit and credit side should be equal, similarly in trial balance debit balance and credit balance should tally.
Adjustment Entries
At the end of every accounting period Adjustment Entries are made in order to adjust the accounts precisely replicate the expenses and revenue of the current period. It is also known as end of period adjustment. It can also be referred as financial reporting that corrects the errors made previously in the accounting period. The basic characteristics of every adjustment entry is that it affects at least one real account and one nominal account.
please answer within the format by providing formula the detailed working
Please provide answer in text (Without image)
Please provide answer in text (Without image)
Please provide answer in text (Without image)
Trending now
This is a popular solution!
Step by step
Solved in 4 steps
