Following are the transactions and adjustments that occurred during the first year of operations at Kissick Company.

Issued $195,000$ shares of $$5-$par$-$value common stock for $$975,000$ in cash.

Borrowed $$510,000$ from Oglesby National Bank and signed a $11\%$ note due in three years.

Incurred and paid $$410,000$ in salaries for the year.

Purchased $$710,000$ of merchandise inventory on account during the year.

Sold inventory costing $$590,000$ for a total of $$910,000,$ all on credit.

Paid rent of $$220,000$ on the sales facilities during the first $11$ months of the year.

Purchased $$190,000$ of store equipment, paying $$52,000$ in cash and agreeing to pay the difference within $90$ days.

Paid the entire $$138,000$ owed for store equipment and $$600,000$ of the amount due to suppliers for credit purchases previously recorded.

Incurred and paid utilities expense of $$35,000$ during the year.

Collected $$835,000$ in cash from customers during the year for credit sales previously recorded.

At year$-$end, accrued $$56,100$ of interest on the note due to Oglesby National Bank.

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.$)$  

Answer rating: 100% (QA)

To prepare the income statement and balance sheet for Kissick Companys first year of operations we n... View the full answer