Selected transactions completed by Equinox Products Inc. during the fiscal year ended December 31, 20Y8, were as follows: 

a. Issued 15,000 shares of $20 par common stock at $30, receiving cash.

b. Issued 4,000 shares of $80 par preferred 5% stock at $100, receiving cash.

c. Issued $500,000 of 10-year, 5% bonds at 104, with interest payable semiannually.

d. Declared a quarterly dividend of $0.50 per share on common stock and $1.00 per share on preferred stock. On the date of record, 100,000 shares of common stock were outstanding, no treasury shares were held, and 20,000 shares of preferred stock were outstanding.

e. Paid the cash dividends declared in (d).

f. Purchased 8,000 shares of treasury common stock at $33 per share.

g. Declared a $1.00 quarterly cash dividend per share on preferred stock. On the date of record, 20,000 shares of preferred stock had been issued.

h. Paid the cash dividends to the preferred stockholders.

i. Sold, at $38 per share, 2,600 shares of treasury common stock purchased in (f ).

j. Recorded the payment of semiannual interest on the bonds issued in (c) and the amortization of the premium for six months. The amortization is determined using the straight-line method. 

Instructions

1. Journalize the selected transactions.

2. The data that follow were taken from the records of Equinox Products Inc. Unless otherwise stated, assume a December 31 balance after adjusting entries.

a. Prepare a multiple-step income statement for the year ended December 31, 20Y8.

b. Prepare a statement of stockholders’ equity for the year ended December 31, 20Y8.

c. Prepare a balance sheet in report form as of December 31, 20Y8.

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Income statement data: 150,000 3,700,000 Advertising expense Cost of goods sold Delivery expense 30,000 Depreciation expense-office buildings and equipment Depreciation expense-store buildings and equipment 30,000 100,000 Income tax expense 140,500 Interest expense 21,000 Interest revenue 30,000 Miscellaneous administrative expense Miscellaneous selling expense 7,500 14,000 Office rent expense Office salaries expense Office supplies expense 50,000 170,000 10,000 Sales 5,313,000 Sales commissions 185,000 Sales salaries expense 385,000 Store supplies expense 21,000 Retained earnings and balance sheet data: Accounts payable 194,300 Accounts receivable 545,000 Accumulated depreciation-office buildings and equipment Accumulated depreciation-store buildings and equipment Allowance for doubtful accounts 1,580,000 4,126,000 8,450 Bonds payable, 5%, due in 10 years 500,000 Cash 282,850 Common stock, $20 par (400,000 shares authorized; 85,000 shares issued, 94,600 outstanding), January 1, 20Y8 1,700,000 Dividends: Cash dividends for common stock 155,120 Cash dividends for preferred stock 100,000 Goodwill 700,000 Income tax payable 44,000 Interest receivable 1,200 Inventory (December 31, 20Y8), at lower of cost (FIFO) or market Office buildings and equipment Paid-in capital from sale of treasury stock, January 1, 20Y8 Paid-in capital in excess of par-common stock, January 1, 20Y8 Paid-in capital in excess of par-preferred stock, January 1, 20Y8 Preferred 5% stock, $80 par (30,000 shares authorized; 16,000 shares issued), January 1, 20Y8 Premium on bonds payable Prepaid expenses Retained earnings, January 1, 20Y8 Store buildings and equipment Treasury stock, January 1, 20Y8 778,000 4,320,000 736,800 70,000 1,280,000 19,000 27,400 8,197,220 12,560,000