Reference no: EM132471037

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

Point 1: Issued 193,000 shares of $5-par-value common stock for $965,000 in cash.

Point 2: Borrowed $500,000 from Oglesby National Bank and signed a 12% note due in three years.

Point 3: Incurred and paid $390,000 in salaries for the year.

Point 4: Purchased $690,000 of merchandise inventory on account during the year.

Point 5: Sold inventory costing $590,000 for a total of $910,000, all on credit.

Point 6: Paid rent of $330,000 on the sales facilities during the first 11 months of the year.

Point 7: Purchased $170,000 of store equipment, paying $50,000 in cash and agreeing to pay the difference within 90 days.

Point 8: Paid the entire $120,000 owed for store equipment and $620,000 of the amount due to suppliers for credit purchases previously recorded.

Point 9: Incurred and paid utilities expense of $38,000 during the year.

Point 10: Collected $845,000 in cash from customers during the year for credit sales previously recorded.

Point 11: At year-end, accrued $60,000 of interest on the note due to Oglesby National Bank.

Point 12: At year-end, accrued $30,000 of past-due December rent on the sales facilities.

Required:

Question a. Make 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. (Hint: You may find it helpful to make T-account for the Cash account since it is affected by most of the transactions.)