Problem:
Record transactions. Usc the horizontal model, or write the journal entry. for each of the following transactions that occurred during the first year of operations at Kissick Co.
a. issued 200.000 shares of SS-par-value common stock for $1.000.000 in cash.
b. Borrowed 5500.000 from the Oglesby National Bank and signed a 12% note due in two years.
e. Incurred and paid 5380.000 in salaries for the year.
d. Purchased 5640.000 of merchandise inventory on account during the year.
e. Sold inventory costing 5580.000 for a total of 5910.000. all on credit. f Paid rent of S110.000 on the sales facilities during the first 11 months of the year.
g. Purchased 5150.000 of store equipment. paying $50.000 in cash and agreeing to pay the difference within 90 days.
h. Paid the entire $100.000 owed for store equipment. and 5620.000 of the amount due to suppliers for credit purchases previously recorded.
i. Incurred and paid utilities expense of 536.000 during the year.
j. Collected 5825.000 in cash from customers during the year for credit sales previously recorded.
k At year-end. accrued $60.000 of interest on the note due to Oglesby National Bank.
l. At year-end. accrued SI0.000 of past-due December rent on the sales facilities.
Prepare an income statement and balance sheet from transaction data.
1) Based on your answers to Problem 4.17. 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 Maccounts for each account affected by the transactions.)
2) Provide a brief written evaluation of Kissick Co.'s results from operations for the year and its financial position at the end of the year.
In your opinion. what are the likely explanations for the company's net loss?