Comprehensive Problem 4 Part 1:

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

1. Journalize the selected transactions.

If no entry is required, select "No entry required" from the dropdown and leave the amount boxes blank. If an amount box does not require an entry, leave it blank.

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

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. Journalize the common stock and the preferred stock entries separately.

Comprehensive Problem 4 Part 2:

Note: You must complete part 1 before part 2.

After all of the transactions for the year ended December 31, 20Y8, had been posted [including the transactions recorded in part (1) and all adjusting entries], the data below were taken from the records of Equinox Products Inc. Unless otherwise stated, assume a December 31 balance after adjusting entries.

Description Debit Credit Cash 450,000 Common Stock 300,000 Paid-In Capital in Excess of Par-Common Stock 150,000 b. Issued 4,000 shares of $80 par preferred 5% stock at $100, receiving cash. Description Debit Credit Cash 400,000 Preferred Stock 320,000 Paid-In Capital in Excess of Par-Preferred Stock 80,000 C. Issued $500,000 of 10-year, 5% bonds at 104, with interest payable semiannually. Description Debit Credit Cash 520,000 Bonds Payable 500,000 Premium on Bonds Payable 20,000 Description Debit Credit 50,000 Cash Dividends 50,000 Cash Dividends Payable Common stock Cash Dividends 20,000 Cash Dividends Payable 20,000 Preferred stock e. Paid the cash dividends declared in (d). Debit Credit Description Cash Dividends Payable 70,000 Cash 70,000 f. Purchased 8,000 shares of treasury common stock at $33 per share. Description Debit Credit Treasury Stock 264,000 Cash 264,000 9. 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. Description Debit Credit Cash Dividends 20,000 Cash Dividends Payable 20,000 h. Paid the cash dividends to the preferred stockholders. Description Debit Credit Cash Dividends Payable 20,000 Cash 20,000 i. Sold, at $38 per share, 2,600 shares of treasury common stock purchased in (f). Description Debit Credit Cash 98,800 Treasury Stock 85,800 Paid-In Capital from Sale of Treasury Stock 13,000 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. Description Debit Credit Interest Expense 11,500 Premium on Bonds Payable 1,000 Cash 12,500 $150,000 3,700,000 30,000 30,000 100,000 140,500 21,000 30,000 Income statement data: Advertising expense Cost of goods sold Delivery expense Depreciation expense-office buildings and equipment Depreciation expense-store buildings and equipment Income tax expense Interest expense Interest revenue Miscellaneous administrative expense Miscellaneous selling expense Office rent expense Office salaries expense Office supplies expense Sales Sales commissions Sales salaries expense Store supplies expense 7,500 14,000 50,000 170,000 10,000 5,313,000 185,000 385,000 21,000 $ 194,300 545,000 1,580,000 4,126,000 8,450 500,000 282,850 1,700,000 155,120 100,000 700,000 Retained earnings and balance sheet data: Accounts payable Accounts receivable Accumulated depreciation-office buildings and equipment Accumulated depreciation-store buildings and equipment Allowance for doubtful accounts Bonds payable, 5%, due in 10 years Cash Common stock, $20 par (400,000 shares authorized; 85,000 shares issued, 94,600 outstanding), January 1, 2048 Dividends: Cash dividends for common stock Cash dividends for preferred stock Goodwill Income tax payable Interest receivable 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, 2048 Paid-in capital in excess of par-common stock, January 1, 2048 Paid-in capital in excess of par-preferred stock, January 1, 2048 Preferred 5% stock, $80 par (30,000 shares authorized; 16,000 shares issued), January 1, 2048 Premium on bonds payable Prepaid expenses Retained earnings, January 1, 2048 Store buildings and equipment Treasury stock, January 1, 2048 44,000 1,200 778,000 4,320,000 0 736,800 70,000 1,280,000 19,000 27,400 8,197,220 12,560,000 0 a. Prepare a multiple-step income statement for the year ended December 31, 20Y8. Equinox Products Inc. Income Statement For the Year Ended December 31, 2018 Sales Cost of goods sold Gross profit Operating expenses: Selling expenses: Sales salaries expense Sales commissions Advertising expense Depreciation expense-store buildings and equipment Delivery expense Store supplies expense Miscellaneous selling expense Administrative expenses: Office salaries expense Office rent expense Depreciation expense-office buildings and equipment Office supplies expense Miscellaneous administrative expense Total operating expenses Operating income Other revenue and expense: Interest revenue Other revenue and expense: Interest revenue Interest expense Income before income tax $ Income tax Net income b. Prepare a statement of stockholders' equity for the year ended December 31, 20Y8. Decreases in equity and purchase should be entered as negative amounts by using a minus sign. If your answer is zero, enter "o". Equinox Products Inc. Statement of Stockholders' Equity For the Year Ended December 31, 2048 Paid-In Capital in Excess of Par- Preferred Stock Paid-In Capital in Excess of Par- Paid-In Capital Common from Sale of Common Stock Stock Treasury Stock Preferred Stock Retained Earnings Treasury Stock Total Balances, January 1 Net income Balances, December 31 C. Prepare a balance sheet in report form as of December 31, 20Y8. Equinox Products Inc. Balance Sheet December 31, 2048 Assets Current assets: Cash $ Accounts receivable Allowance for doubtful accounts Inventory Interest receivable Prepaid expenses Total current assets Property, plant, and equipment: Store buildings and equipment Accumulated depreciation Office buildings and equipment Accumulated depreciation Total property, plant, and equipment Intangible assets: Goodwill Total assets VI Liabilities Current liabilities: Accounts payable Income tax payable Total current liabilities Long-term liabilities: Bonds payable Premium on bonds payable Total liabilities VI Stockholders' Equity Paid-in capital: Preferred 5% stock Excess of issue price over par Paid-in capital, preferred stock Common stock Excess of issue price over par Paid-in capital, common stock From sale of treasury stock Total paid-in capital Retained earnings Treasury stock Total stockholders' equity Total liabilities and Stockholders' Equity