Following are the transactions and adjustments that occurred
during the first year of operations at Kissick Co.
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.)
CASH | ||||||
DESCRIPTION | DEBIT | CREDIT | ||||
Common Stock | $980,000 | |||||
Notes Payable | $540,000 | |||||
Salaries Expense | $390,000 | |||||
Rent Expense | $220,000 | |||||
Store Equipment | $52,000 | |||||
Accounts Payable | $748,000 | |||||
Utilities Expense | $34,000 | |||||
Accounts Receivable | $845,000 | |||||
Closing Balance | $921,000 | |||||
INCOME STATEMENT | ||||||
Sales | $910,000 | |||||
Cost of goods sold | $570,000 | |||||
Gross Profit | $340,000 | |||||
Operating Expenses: | ||||||
Utilities Expense | $34,000 | |||||
Rent Expense | $240,000 | (220000+20000) | ||||
Salaries Expense | $390,000 | |||||
Total Operating Expenses | $664,000 | |||||
Loss From Operations | ($324,000) | |||||
Interest expense | $59,400 | |||||
Net Loss | ($383,400) | |||||
BALANCE SHEET | ||||||
Assets: | ||||||
Cash | $921,000 | |||||
Accounts Receivable | $65,000 | (910000-845000) | ||||
Merchandise Inventory | $160,000 | (730000-570000) | ||||
Total Current Assets | $1,146,000 | |||||
Equipment | $170,000 | |||||
Total Assets | $1,316,000 | |||||
Liabilities: | ||||||
Accounts Payable | $100,000 | (730000-630000) | ||||
Interest Payable | $59,400 | |||||
Rent Payable | $20,000 | |||||
Total Current Liabilities | $179,400 | |||||
Notes Payable | $540,000 | |||||
Total Liabilities | $719,400 | |||||
Stockhloders Equity: | ||||||
Common Stock | $980,000 | |||||
Deficit/Net Loss | ($383,400) | |||||
Total Stockholders Equity | $596,600 | |||||
Total Liabilities and Stockholders Equity | $1,316,000 | |||||
Following are the transactions and adjustments that occurred during the first year of operations at Kissick...
Following are the transactions and adjustments that occurred during the first year of operations at Kissick Co. a. Issued 191,000 shares of $4-par-value common stock for $764,000 in cash. b. Borrowed $540,000 from Oglesby National Bank and signed a 11% note due in three years. c. Incurred and paid $400,000 in salaries for the year. d. Purchased $670,000 of merchandise inventory on account during the year e. Sold inventory costing $580,000 for a total of $920,000, all on credit. f....
Below are the transactions and adjustments that occurred during the first year of operations at Kissick Co a. Issued 197,000 shares of $6-par-value common stock for $1,182,000 in cash. b. Borrowed $520,000 from Oglesby National Bank and signed a 10% note due in three years c. Incurred and paid $380,000 in salaries for the year d. Purchased $690,000 of merchandise inventory on account during the year e. Sold inventory costing $580,000 for a total of $910,000, all on credit. f....
Following are the transactions and adjustments that occurred during the first year of operations at Kissick Co. y car. a. Issued 198,000 shares of $4-par-value common stock for $792,000 in cash. b. Borrowed $530,000 from Oglesby National Bank and signed a 11% note due in three years. c. Incurred and paid $400,000 in salaries for the year. d. Purchased $710,000 of merchandise inventory on account during the year. e. Sold inventory costing $590,000 for a total of $920,000, all on...
Following are the transactions and adjustments that occurred during the first year of operations at Kissick Co. a. Issued 192,000 shares of $5-par-value common stock for $960,000 in cash. b. Borrowed $510,000 from Oglesby National Bank and signed a 11% note due in three years. c. Incurred and paid $410,000 in salaries for the year. d. Purchased $650,000 of merchandise inventory on account during the year. e. Sold inventory costing $590,000 for a total of $910,000, all on credit. f....
Following are the transactions and adjustments that occurred during the first year of operations at Kissick Co. a. Issued 197,000 shares of $5-par-value common stock for $985,000 in cash. b. Borrowed $500,000 from Oglesby National Bank and signed a 10% note due in three years. c. Incurred and paid $400,000 in salaries for the year. d. Purchased $700,000 of merchandise inventory on account during the year. e. Sold inventory costing $580,000 for a total of $910,000, all on credit. f....
Following are the transactions and adjustments that occurred during the first year of operations at Kissick Co. a. Issued 191,000 shares of $5-par-value common stock for $955,000 in cash. b. Borrowed $540,000 from Oglesby National Bank and signed a 11% note due in three years. c. Incurred and paid $400,000 in salaries for the year. d. Purchased $710,000 of merchandise inventory on account during the year. e. Sold inventory costing $580,000 for a total of $910,000, all on credit. f....
Below are the transactions and adjustments that oocurred during the first year of operations at Kissick Co a. Issued 194,000 shares of S6-par-value common stock for $1,164,000 in cash. b. Borrowed $530,000 from Oglesby National Bank and signed a 11 % note due in three years. c. Incurred and paid $410,000 in salaries for the year d. Purchased $680,000 of merchandise inventory on account during the year e. Sold inventory costing $580,000 for a total of $920,000, all on credit...
Following are the transactions and adjustments that occurred during the first year of operations at Kissick Co. Issued 197,000 shares of $4-par-value common stock for $788,000 in cash. Borrowed $540,000 from Oglesby National Bank and signed a 11% note due in three years. Incurred and paid $400,000 in salaries for the year. Purchased $730,000 of merchandise inventory on account during the year. Sold inventory costing $570,000 for a total of $910,000, all on credit. Paid rent of $220,000 on the...
Following are the transactions and adjustments that occurred during the first year of operations at Kissick Co. Issued 198,000 shares of $4-par-value common stock for $792,000 in cash. Borrowed $520,000 from Oglesby National Bank and signed a 10% note due in three years. Incurred and paid $410,000 in salaries for the year. Purchased $730,000 of merchandise inventory on account during the year. Sold inventory costing $570,000 for a total of $900,000, all on credit. Paid rent of $330,000 on the...
Below are the transactions and adjustments that occurred during the first year of operations at Kissick Co Issued 197,000 shares of $5-par-value common stock for $985,000 in cash. Borrowed $520,000 from Oglesby National Bank and signed a 11% note due in three years. Incurred and paid $390,000 in salaries for the year. Purchased $690,000 of merchandise inventory on account during the year. Sold inventory costing $590,000 for a total of $920,000, all on credit. Paid rent of $220,000 on the...