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Comprehensive Problem 4 Part 2 After all of the transactions for the year ended December 31, 20Y8, had been posted [including the transactions recorded in

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Comprehensive Problem 4

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.

Income statement data:

Advertising expense$150,000

Cost of goods sold3,700,000

Delivery expense30,000

Depreciation expense?office buildings and equipment30,000

Depreciation expense?store buildings and equipment100,000

Income tax expense140,500

Interest expense21,000

Interest revenue30,000

Miscellaneous administrative expense7,500

Miscellaneous selling expense14,000

Office rent expense50,000

Office salaries expense170,000

Office supplies expense10,000

Sales5,313,000

Sales commissions185,000

Sales salaries expense385,000

Store supplies expense21,000

Retained earnings and balance sheet data:

Accounts payable$194,300

Accounts receivable545,000

Accumulated depreciation?office buildings and equipment1,580,000

Accumulated depreciation?store buildings and equipment4,126,000

Allowance for doubtful accounts8,450

Bonds payable, 5%, due in 10 years500,000

Cash282,850

Common stock, $20 par (400,000 shares authorized; 85,000 shares issued, 94,600 outstanding), January 1, 20Y81,700,000

Dividends:

Cash dividends for common stock155,120

Cash dividends for preferred stock100,000

Goodwill700,000

Income tax payable44,000I

nterest receivable1,200

Inventory (December 31, 20Y8), at lower of cost (FIFO) or market778,000

Office buildings and equipment4,320,000

Paid-in capital from sale of treasury stock, January 1, 20Y80

Paid-in capital in excess of par?common stock, January 1, 20Y8736,800

Paid-in capital in excess of par?preferred stock, January 1, 20Y870,000

Preferred 5% stock, $80 par (30,000 shares authorized;16,000 shares issued), January 1, 20Y81,280,000

Premium on bonds payable19,000

Prepaid expenses27,400

Retained earnings, January 1, 20Y88,197,220

Store buildings and equipment12,560,000

Treasury stock, January 1, 20Y80

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

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\fEquinox Products Inc. Income Statement For the Year Ended December 31, 20YS Sales 5,313,000 Cost of goods sold v 3,700,000 Gross profit v $ 1,613,000 Operating expenses: Selling expenses: Sales salaries expense S $ 385,000 Sales commissions v 185,000 V Advertising expense v 150,000 Depreciation expense-store buildings and equipment v 100,000 Delivery expense v 30,000 Store supplies expense v 21,000 V Miscellaneous selling expense v 14,000 V $ 885,000 V Administrative expenses: Office salaries expense v S$ 170,000 Office rent expense v 50,000 V Depreciation expense-office buildings and equipment v 30,000 V Office supplies expense 10,000 V Miscellaneous administrative expense v 7,500 V 267,500 V Total operating expenses 1, 152,500 Operating income $ 460,500Equinox Products Inc. Statement of Stockholders' Equity For the Year Ended December 31, 20Y8 Paid-In Capital Paid-In Capital in Excess in Excess of Par- of Par- Paid-In Capital Preferred Common from Sale of Retained Treasury Preferred Stock Stock Common Stock Stock Treasury Stock Earnings Stock Total Balances, January 1 v $ 1,280,000 70,000 1,700,000 V 736,800 0 8,197,220 0 11,984,020 Issued common stock Issued preferred stock v Net income v 329,000 329,000 Cash dividends v Sale of treasury stock v Purchase of treasury stock v Balances, December 31 v

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