Reference no: EM132624444
Question - Following are the transactions and adjustments that occurred during the first year of operations at Kissick Co.
1. Issued 198,000 shares of $5-par-value common stock for $990,000 in cash.
2. Borrowed $510,000 from Oglesby National Bank and signed a 10% note due in three years.
3. Incurred and paid $390,000 in salaries for the year.
4. Purchased $650,000 of merchandise inventory on account during the year.
5. Sold inventory costing $570,000 for a total of $900,000, all on credit.
6. Paid rent of $110,000 on the sales facilities during the first 11 months of the year.
7. Purchased $150,000 of store equipment, paying $55,000 in cash and agreeing to pay the difference within 90 days.
8. Paid the entire $95,000 owed for store equipment and $600,000 of the amount due to suppliers for credit purchases previously recorded.
9. Incurred and paid utilities expense of $38,000 during the year.
10. Collected $845,000 in cash from customers during the year for credit sales previously recorded.
11. At year-end, accrued $51,000 of interest on the note due to Oglesby National Bank.
12. At year-end, accrued $10,000 of past-due December rent on the sales facilities.
Required - Prepare the income statement (ignoring income taxes) for Kissick Co.'s first year of operations and a balance sheet as of the end of the year.