llowing are the transactions and adjustments that occurred during the first year of operations at Kissick Company. a. Issued 199,000 shares of $4-par-value common stock for $796,000 in cash. b. Borrowed $510,000 from Oglesby National Bank and signed a 11% note due in three years. c. Incurred and paid $400,000 in salaries for the year. d. Purchased $730,000 of merchandise inventory on account during the year. e. Sold inventory costing $570,000 for a total of $910,000, all on credit. f. Paid rent of $110,000 on the sales facilities during the first 11 months of the year. g. Purchased $160,000 of store equipment, paying $55,000 in cash and agreeing to pay the difference within 90 days. h. Paid the entire $105,000 owed for store equipment and $620,000 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 $825,000 in cash from customers during the year for credit sales previously recorded. k. At year-end, accrued $56,100 of interest on the note due to Oglesby National Bank. 1. At year-end, accrued $10,000 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 Exhit 43
llowing are the transactions and adjustments that occurred during the first year of operations at Kissick Company. a. Issued 199,000 shares of $4-par-value common stock for $796,000 in cash. b. Borrowed $510,000 from Oglesby National Bank and signed a 11% note due in three years. c. Incurred and paid $400,000 in salaries for the year. d. Purchased $730,000 of merchandise inventory on account during the year. e. Sold inventory costing $570,000 for a total of $910,000, all on credit. f. Paid rent of $110,000 on the sales facilities during the first 11 months of the year. g. Purchased $160,000 of store equipment, paying $55,000 in cash and agreeing to pay the difference within 90 days. h. Paid the entire $105,000 owed for store equipment and $620,000 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 $825,000 in cash from customers during the year for credit sales previously recorded. k. At year-end, accrued $56,100 of interest on the note due to Oglesby National Bank. 1. At year-end, accrued $10,000 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 Exhit 43
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Please do not give solution in image format thanku
Transcribed Image Text:Following are the transactions and adjustments that occurred during the first year of operations at Kissick Company.
a. Issued 199,000 shares of $4-par-value common stock for $796,000 in cash.
b. Borrowed $510,000 from Oglesby National Bank and signed a 11% note due in three years.
c. Incurred and paid $400,000 in salaries for the year.
d. Purchased $730,000 of merchandise inventory on account during the year.
e. Sold inventory costing $570,000 for a total of $910,000, all on credit.
f. Paid rent of $110,000 on the sales facilities during the first 11 months of the year.
g. Purchased $160,000 of store equipment, paying $55,000 in cash and agreeing to pay the difference within 90 days.
h. Paid the entire $105,000 owed for store equipment and $620,000 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 $825,000 in cash from customers during the year for credit sales previously recorded.
k. At year-end, accrued $56,100 of interest on the note due to Oglesby National Bank.
1. At year-end, accrued $10,000 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 Exhib
4.3.
Transcribed Image Text:Sales
Cost of goods sold
Gross profit
Salaries expense
Utilities expense
Rent expense
Loss from operations
Net loss
KISSICK COMPANY
Income Statement
Total current assets
Total assets
Total liabilities
Assets:
Balance Sheet
Total current liabilities
+
Liabilities:
Stockholders' Equity:
Total Stockholders' equity
Total liabilities and stockholders' equity
$
$
$
>
$
$
0
0
0
0
0
0
0
0
0
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
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