Question

Use the horizontal model, or write the journal entry, for each of the following transactions and adjustments that occurred during the first year of operations at Kissick Co. a. Issued 220,000 shares of $6-par-value common stock for $1,320,000 in cash. b. Borrowed $510,000 from Oglesby National Bank and signed a 12% note due in two years. c. Incurred and paid $440,000 in salaries for the year. d. Purchased $670,000 of merchandise inventory on account during the year. e. Sold inventory costing $620,000 for a total of $960,000, all on credit. f. Paid rent of $220,000 on the sales facilities during the first 11 months of the year. g. Purchased $140,000 of store equipment, paying $51,000 in cash and agreeing to pay the difference within 90 days. h. Paid the entire $89,000 owed for store equipment and $600,000 of the amount due to suppliers for credit purchases previously recorded. i. Incurred and paid utilities expense of $45,000 during the year. j. Collected $865,000 in cash from customers during the year for credit sales previously recorded. k. At year-end, accrued $61,200 of interest on the note due to Oglesby National Bank. 1. At year-end, accrued $20,000 of past-due December rent on the sales facilities. Required: a. Record each transaction in the appropriate columns. Indicate the financial statement effect. Complete this question by entering your answers in the tabs below. Required A Record each transaction in the appropriate columns. Indicate the financial statement effect. (Enter decreases with a minus sign to indicate a negative financial statement effect.) Net income = Revenue - Expenses Transaction ASSETS Accounts Merchandise + Receivable + Inventory LIABILITIES Notes Accounts Payable + Payable STOCKHOLDERS' EQUITY Common Stock Cash + Equipment = +

Answer 1

A/R Assets inventory Equipment S.no Ba Liabilities Notes payable AP Equity Common stock 1320000 Retained Earnigs Income statement Expense Revenue Net Income Cash 1320000 510000 UI UI + 510000 -440000 -440000 440000 -440000 670000 670000 960000 960000 960000/= -620000 -220000 = w -620000 620000 220000 960000 -620000 -220000 140000 -220000 -51000 -689000 -45000 8650001 -865000 89000 -689000 1 h -45000/= 45000 -45000 4k 51 -6 total 61200 20000 151200 -61200= -20000/= -446200 61200 20000/= 1406200 -61200 -20000 -446200 1250000 95000 50000 140000 5100001 1320000 960000