Following are the transactions and adjustments that occurred during the first year of operations at Kissick Co. Issued 191,000 shares of $4-par-value common stock for $764,000 in cash. Borrowed $500,000 from Oglesby National Bank and signed a 11% note due in three years. Incurred and paid $420,000 in salaries for the year. Purchased $720,000 of merchandise inventory on account during the year. Sold inventory costing $570,000 for a total of $920,000, all on credit. Paid rent of $330,000 on the sales facilities during the first 11 months of the year. Purchased $170,000 of store equipment, paying $55,000 in cash and agreeing to pay the difference within 90 days. Paid the entire $115,000 owed for store equipment and $630,000 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 $55,000 of interest on the note due to Oglesby National Bank. At year-end, accrued $30,000 of past-due December rent on the sales facilities. Required: a. 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. (Hint: You may find it helpful to prepare a T-account for the Cash account since it is affected by most of the transactions.)

Survey of Accounting (Accounting I)

8th Edition

ISBN:9781305961883

Author:Carl Warren

Publisher:Carl Warren

Chapter2: Basic Accounting Systems: Cash Basis

Section: Chapter Questions

Problem 2.4.1P: Financial statements Padget Home Services began its operations on January 1, 20Y7 (see Problem 2-3)....

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Problem 4-22 (Algo) Prepare an income statement and balance sheet from transaction data LO 1

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

Issued 191,000 shares of $4-par-value common stock for $764,000 in cash.
Borrowed $500,000 from Oglesby National Bank and signed a 11% note due in three years.
Incurred and paid $420,000 in salaries for the year.
Purchased $720,000 of merchandise inventory on account during the year.
Sold inventory costing $570,000 for a total of $920,000, all on credit.
Paid rent of $330,000 on the sales facilities during the first 11 months of the year.
Purchased $170,000 of store equipment, paying $55,000 in cash and agreeing to pay the difference within 90 days.
Paid the entire $115,000 owed for store equipment and $630,000 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 $55,000 of interest on the note due to Oglesby National Bank.
At year-end, accrued $30,000 of past-due December rent on the sales facilities.

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

Required A1
Required A2
Prepare an income statement (ignoring income taxes) for Kissick Co.'s first year of operations 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.)
KISSICK CO.
Income Statement
< Required A1
Required A2 >

KISSICK CO.
Balance Sheet
Assets:
Total current assets
Total assets
Liabilities:
Total current liabilities
Total liabilities
Stockholders' Equity:
Total Stockholders' equity
Total liabilities and stockholders' equity

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

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