1. To demonstrate your ability to apply accounting techniques, complete the following exercises from your textbook. Be sure to demonstrate the process used to complete each exercise. Present your answers and analysis in a professional manner. This exercise allows you to practice methods for recording transactions. Record transactions. Use the horizontal model, or write the journal entry, for each of the following transactions that occurred during the first year of operations at Kissick Co.

a. Issued 200,000 share of $5 par-value common stock for $1, 000, 00 in cash

b. Borrowed $500,000 from Oglesby National Bank and signed a 12% note due in two years.

c. Incurred and paid $380,000 in salaries for the year.

d. Purchased $640,000 of merchandise inventory on account during the year.

e. Sold inventory costing $580,000 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 $150,000 of store equipment, paying $50,000 in cash and agreeing to pay the difference within in 90ndays.

h. Paid the entire $100,000 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 $36,000 during the year.

j. Collected $825,000 in cash from customers during the year for credit sales previously recorded

k. At the year-end, accrued $60,000 of interest on the note due to Ogelsby National Bank

l. At year-end, accrued $10,000 of past due December rent on the sales facilities.

2. Prepare an income statement and balance sheet from transaction data, page 132. This uses the same transaction data as provided in P-4.17 in an effort to generate the income statement and balance sheet from those events.

a. Based on your answers to Problem 4.17, 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.

b. Provide a brief written evaluation of Kissick Co.’s results from operations for the year and its financial position at the end of the year. In your opinion what are the likely explanations for the company’s net loss?