
Concept Introduction:
Income Statement:
Income Statement is the part of the financial statement which is prepared to calculate the net income earned by the organization. In the income statement, all expenses are subtracted from the revenues to calculate the net income. It is prepared for a particular period.
There are two ways to present and income statement: Single-step and Multi-step. In the, multi-step income statement the net income calculated after showing multiple steps. In this statement operating and items are separate from non operating items
Requirement-1:
To Prepare:
The income statement and the balance sheet for Kissick Co

Answer to Problem 4.22P
The income statement and the balance sheet for Kissick Co is as follows:
Kissick Co. | ||
Income Statement | ||
Revenue: | ||
Sales revenue | $ 132,100 | |
Less: Expenses: | ||
$ 8,400 | ||
Wages Expense | $ 48,660 | |
Interest Expense | $ 3,000 | |
Insurance expense | $ 3,800 | |
Rent Expense | $ 12,500 | |
Supplies Expense | $ 24,570 | |
Property taxes expense | $ 12,800 | |
Repairs Expense | $ 2,910 | |
Other Expenses | $ 25,640 | |
Total Expenses | $ 142,280 | |
Net Income | $ (10,180) |
Kissick Co. | ||
Balance Sheet | ||
ASSETS: | ||
Current Assets: | ||
Cash | $ 18,500 | |
Supplies | $ 3,300 | |
Prepaid Insurance | $ 3,400 | |
Total Current Assets | $ 25,200 | |
Property Plant and Equipment: | ||
Equipment | $ 90,930 | |
Les: | $ (34,650) | $ 56,280 |
TOTAL ASSETS | $ 81,480 | |
LIABILITIES AND EQUITY: | ||
Current Liabilities: | ||
Accounts Payable | $ 6,800 | |
Interest Payable | $ 250 | |
Rent Payable | $ 500 | |
Utilities Payable | $ 650 | |
Wages payable | $ 1,800 | |
Property taxes Payable | $ 1,000 | |
Total Current Liabilities | $ 11,000 | |
Long term Liabilities: | ||
Long term notes payable | $ 25,000 | |
Owner's Equity | $ 45,480 | |
TOTAL LIABILITIES AND EQUITY | $ 81,480 |
Explanation of Solution
The income statement and the balance sheet for Kissick Co is explained as follows:
Kissick Co. | ||
Income Statement | ||
Revenue: | ||
Sales revenue | $ 132,100 | |
Less: Expenses: | ||
Depreciation Expense- Equipment | $ 8,400 | |
Wages Expense | $ 48,660 | |
Interest Expense | $ 3,000 | |
Insurance expense | $ 3,800 | |
Rent Expense | $ 12,500 | |
Supplies Expense | $ 24,570 | |
Property taxes expense | $ 12,800 | |
Repairs Expense | $ 2,910 | |
Other Expenses | $ 25,640 | |
Total Expenses | $ 142,280 | |
Net Income | $ (10,180) |
Kissick Co. | ||
Balance Sheet | ||
ASSETS: | ||
Current Assets: | ||
Cash | $ 18,500 | |
Supplies | $ 3,300 | |
Prepaid Insurance | $ 3,400 | |
Total Current Assets | $ 25,200 | |
Property Plant and Equipment: | ||
Equipment | $ 90,930 | |
Les: Accumulated depreciation- Equipment | $ (34,650) | $ 56,280 |
TOTAL ASSETS | $ 81,480 | |
LIABILITIES AND EQUITY: | ||
Current Liabilities: | ||
Accounts Payable | $ 6,800 | |
Interest Payable | $ 250 | |
Rent Payable | $ 500 | |
Utilities Payable | $ 650 | |
Wages payable | $ 1,800 | |
Property taxes Payable | $ 1,000 | |
Total Current Liabilities | $ 11,000 | |
Long term Liabilities: | ||
Long term notes payable | $ 25,000 | |
Owner's Equity | $ 45,480 | |
TOTAL LIABILITIES AND EQUITY | $ 81,480 |
Concept Introduction:
Balance Sheet : The Balance sheet is a summary of Assets, Liabilities and equity accounts that reports the financial position of the business as on a specific date. Assets are further classifies into Current Assets, Long Term Investments, Plant Assets and Intangible assets. And Liabilities are further classified into Current Liabilities and Long term liabilities.
Income Statement:
Income Statement is the part of the financial statement which is prepared to calculate the net income earned by the organization. In the income statement, all expenses are subtracted from the revenues to calculate the net income. It is prepared for a particular period.
There are two ways to present and income statement: Single-step and Multi-step. In the, multi-step income statement the net income calculated after showing multiple steps. In this statement operating and items are separate from non operating items
Requirement-2:
To Discuss:
The evaluation of the income statement and the balance sheet

Answer to Problem 4.22P
The first year of the operation of the company shows a net loss due to higher amount of expense as compared to the lower revenues for the year. The balance sheet shows a higher amount if investment in assets due to the beginning of the operations.
Explanation of Solution
The income statement and the balance sheet for Kissick Co is explained as follows:
Kissick Co. | ||
Income Statement | ||
Revenue: | ||
Sales revenue | $ 132,100 | |
Less: Expenses: | ||
Depreciation Expense- Equipment | $ 8,400 | |
Wages Expense | $ 48,660 | |
Interest Expense | $ 3,000 | |
Insurance expense | $ 3,800 | |
Rent Expense | $ 12,500 | |
Supplies Expense | $ 24,570 | |
Property taxes expense | $ 12,800 | |
Repairs Expense | $ 2,910 | |
Other Expenses | $ 25,640 | |
Total Expenses | $ 142,280 | |
Net Income | $ (10,180) |
Kissick Co. | ||
Balance Sheet | ||
ASSETS: | ||
Current Assets: | ||
Cash | $ 18,500 | |
Supplies | $ 3,300 | |
Prepaid Insurance | $ 3,400 | |
Total Current Assets | $ 25,200 | |
Property Plant and Equipment: | ||
Equipment | $ 90,930 | |
Less: Accumulated depreciation- Equipment | $ (34,650) | $ 56,280 |
TOTAL ASSETS | $ 81,480 | |
LIABILITIES AND EQUITY: | ||
Current Liabilities: | ||
Accounts Payable | $ 6,800 | |
Interest Payable | $ 250 | |
Rent Payable | $ 500 | |
Utilities Payable | $ 650 | |
Wages payable | $ 1,800 | |
Property taxes Payable | $ 1,000 | |
Total Current Liabilities | $ 11,000 | |
Long term Liabilities: | ||
Long term notes payable | $ 25,000 | |
Owner's Equity | $ 45,480 | |
TOTAL LIABILITIES AND EQUITY | $ 81,480 |
The first year of the operation of the company shows a net loss due to higher amount of expense as compared to the lower revenues for the year. The balance sheet shows a higher amount if investment in assets due to the beginning of the operations.
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