BDOUR 4,980 Gain on Sale of Investment Investments in Solstice Corp. Stock 40,020 p. Recorded the payment of semiannual interest on the bands issued in (c) and the amortization of the premium for six months. The amortization is determined using the straight-line method. Description Credit Debit 11,500 Interest Expense Premium on Bonds Payable 1,000 Cash 12,500 4. Accrued interest for three months on the Dream Inc. bonds purchased in (1). Description Debit Credit Interest Receivable 1,125 Interest Revenue 1,125 r. Pinkberry Co. recorded total earnings of $240,000. Equinox Products recorded equity earnings for its share of Pinkberry Co. net income. Description Debit Credit Investment in Pinkberry Co. Stock 76,800 Income from Pinkberry Co. 76,800 s. The fair value for Solstice Corp. stock was $39.02 per share on December 31, Year 1. The investment is adjusted to fair value, using a valuation allowance account. Assume that Valuation Allowance for Available-for-Sale Investments had a beginning balance of zero. Description Debit Credit Unrealized Gain (Loss) on Available-for-Sale Investments 6,500 Valuation Allowance for Available-for-Sale Investments 6,500 Retained earnings and balance sheet waar Accounts payable $194,300 Accounts receivable 545,000 Accumulated depreciation-office buildings and equipment 1,580,000 Accumulated depreciation-store buildings and equipment 4,126,000 Allowance for doubtful accounts 8,450 Available-for-sale investments (at cost) 260,130 Bonds payable, 5%, due 20Y2 500,000 Cash 246,000 2,000,000 Common stock, $20 par (400,000 shares authorized; 100,000 shares issued, 94,600 outstanding) Dividends: Cash dividends for common stock 155,120 Cash dividends for preferred stock 100,000 Goodwill 500,000 Income tax payable 44,000 Interest receivable 1,125 Investment in Pinkberry Co. stock (equity method) 1,009,300 90,000 Investment in Dream Inc. bonds (long term) Merchandise inventory (December 31, Year 1), at lower of cost (FIFO) or market 778,000 Office buildings and equipment 4,320,000 Paid-in capital from sale of treasury stock 13,000 Excess of issue price over par-common stock 886,800 150,000 Excess of issue price over par-preferred stock Preferred 5% stock, $80 par (30,000 shares authorized; 20,000 shares issued) 1,600,000 Premium on bonds payable 19,000 Prepaid expenses 27,400 Retained earnings, January 1, Year 1 9,319,725 Store buildings and equipment 12,560,000 178,200 Treasury stock (5,400 shares of common stock at cost of $33 per share) Unrealized gain (loss) on available-for-sale investments (6,500) Valuation allowance for available for sale investments (6,500) On your own paper, in the working papers, or using a spreadsheet, prepare the following: a. Prepare a multiple-step income statement for the year ended December 31, Year 1, concluding with earnings per share. In computing earnings per share, assume that the average number of common s outstanding was 100,000 and preferred dividends were $100,000. (Round earnings per share to the nearest cent.) Save your calculations and enter the requested amounts below. b. Prepare a retained earnings statement for the year ended December 31, Year 1. Save your calculations and enter the requested amounts below. c. Prepare a balance sheet in report form as of December 31, Year 1. Save your calculations and enter the requested amounts below. If required, only use the minus sign to indicate loss before income tax, net loss, or a deficit balance in retained earnings. Gross profit 1,554,000 Total selling expenses 885,000 Total administrative expenses 267,500 Total operating expenses Income from operations $ Net other expenses and income $ Income tax $ Net income $ Earnings per common share (rounded to the nearest cent) Retained earnings, January 1, Year 1 Total current assets C. Prepare a balance sheet in report form as of December 31, Year 1. Save your calculations and enter the requested amounts below. If required, only use the minus sign to indicate loss before income tax, net loss, or a deficit balance in retained earings. Gross profit 1,554,000 Total selling expenses 885,000 Total administrative expenses 267,500 Total operating expenses $ Income from operations $ Net other expenses and income $ Income tax $ Net Income $ Eamings per common share (rounded to the nearest cent) $ Retained earnings, January 1, Year 1 $ Total current assets $ Investment in Dream Inc. bonds $ $ Total property, plant, and equipment Total assets $ $ Total current liabilities Net long-term liabilities $ Total liabilities $ Total paid-in capital preferred 5% stock $ Total paid-in capital common stock, $20 par $ Total paid-in capital $ Retained earnings, December 31, Year 1 Total stockholders' equity 13,858,705 BDOUR 4,980 Gain on Sale of Investment Investments in Solstice Corp. Stock 40,020 p. Recorded the payment of semiannual interest on the bands issued in (c) and the amortization of the premium for six months. The amortization is determined using the straight-line method. Description Credit Debit 11,500 Interest Expense Premium on Bonds Payable 1,000 Cash 12,500 4. Accrued interest for three months on the Dream Inc. bonds purchased in (1). Description Debit Credit Interest Receivable 1,125 Interest Revenue 1,125 r. Pinkberry Co. recorded total earnings of $240,000. Equinox Products recorded equity earnings for its share of Pinkberry Co. net income. Description Debit Credit Investment in Pinkberry Co. Stock 76,800 Income from Pinkberry Co. 76,800 s. The fair value for Solstice Corp. stock was $39.02 per share on December 31, Year 1. The investment is adjusted to fair value, using a valuation allowance account. Assume that Valuation Allowance for Available-for-Sale Investments had a beginning balance of zero. Description Debit Credit Unrealized Gain (Loss) on Available-for-Sale Investments 6,500 Valuation Allowance for Available-for-Sale Investments 6,500 Retained earnings and balance sheet waar Accounts payable $194,300 Accounts receivable 545,000 Accumulated depreciation-office buildings and equipment 1,580,000 Accumulated depreciation-store buildings and equipment 4,126,000 Allowance for doubtful accounts 8,450 Available-for-sale investments (at cost) 260,130 Bonds payable, 5%, due 20Y2 500,000 Cash 246,000 2,000,000 Common stock, $20 par (400,000 shares authorized; 100,000 shares issued, 94,600 outstanding) Dividends: Cash dividends for common stock 155,120 Cash dividends for preferred stock 100,000 Goodwill 500,000 Income tax payable 44,000 Interest receivable 1,125 Investment in Pinkberry Co. stock (equity method) 1,009,300 90,000 Investment in Dream Inc. bonds (long term) Merchandise inventory (December 31, Year 1), at lower of cost (FIFO) or market 778,000 Office buildings and equipment 4,320,000 Paid-in capital from sale of treasury stock 13,000 Excess of issue price over par-common stock 886,800 150,000 Excess of issue price over par-preferred stock Preferred 5% stock, $80 par (30,000 shares authorized; 20,000 shares issued) 1,600,000 Premium on bonds payable 19,000 Prepaid expenses 27,400 Retained earnings, January 1, Year 1 9,319,725 Store buildings and equipment 12,560,000 178,200 Treasury stock (5,400 shares of common stock at cost of $33 per share) Unrealized gain (loss) on available-for-sale investments (6,500) Valuation allowance for available for sale investments (6,500) On your own paper, in the working papers, or using a spreadsheet, prepare the following: a. Prepare a multiple-step income statement for the year ended December 31, Year 1, concluding with earnings per share. In computing earnings per share, assume that the average number of common s outstanding was 100,000 and preferred dividends were $100,000. (Round earnings per share to the nearest cent.) Save your calculations and enter the requested amounts below. b. Prepare a retained earnings statement for the year ended December 31, Year 1. Save your calculations and enter the requested amounts below. c. Prepare a balance sheet in report form as of December 31, Year 1. Save your calculations and enter the requested amounts below. If required, only use the minus sign to indicate loss before income tax, net loss, or a deficit balance in retained earnings. Gross profit 1,554,000 Total selling expenses 885,000 Total administrative expenses 267,500 Total operating expenses Income from operations $ Net other expenses and income $ Income tax $ Net income $ Earnings per common share (rounded to the nearest cent) Retained earnings, January 1, Year 1 Total current assets C. Prepare a balance sheet in report form as of December 31, Year 1. Save your calculations and enter the requested amounts below. If required, only use the minus sign to indicate loss before income tax, net loss, or a deficit balance in retained earings. Gross profit 1,554,000 Total selling expenses 885,000 Total administrative expenses 267,500 Total operating expenses $ Income from operations $ Net other expenses and income $ Income tax $ Net Income $ Eamings per common share (rounded to the nearest cent) $ Retained earnings, January 1, Year 1 $ Total current assets $ Investment in Dream Inc. bonds $ $ Total property, plant, and equipment Total assets $ $ Total current liabilities Net long-term liabilities $ Total liabilities $ Total paid-in capital preferred 5% stock $ Total paid-in capital common stock, $20 par $ Total paid-in capital $ Retained earnings, December 31, Year 1 Total stockholders' equity 13,858,705