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.

Income statement data:

Advertising expense $150,000

Cost of goods sold 3,700,000

Delivery expense 30,000

Depreciation expenseoffice buildings and equipment 30,000

Depreciation expensestore buildings and equipment 100,000

Income tax expense 140,500

Interest expense 21,000

Interest revenue 30,000

Miscellaneous administrative expense 7,500

Miscellaneous selling expense 14,000

Office rent expense 50,000

Office salaries expense 170,000

Office supplies expense 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 depreciationoffice buildings and equipment 1,580,000

Accumulated depreciationstore buildings and equipment 4,126,000

Allowance for doubtful accounts 8,450

Bonds payable, 5%, due in 10 years 500,000

Cash 282,850

Common stock, $20 par (400,000 shares authorized; 100,000 shares issued, 94,600 outstanding) 2,000,000

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 778,000

Office buildings and equipment 4,320,000

Paid-in capital from sale of treasury stock 13,000

Excess of issue price over parcommon stock 886,800

Excess of issue price over parpreferred stock 150,000

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, 20Y8 8,197,220 Store buildings and equipment 12,560,000

Treasury stock (5,400 shares of common stock at cost of $33 per share) 178,200

1. Prepare an income statement. Deductions in the Other Revenue and Expense section should be entered as negative amounts.

2. Prepare a retained earnings statement. Decreases in equity should be entered as negative amounts by using a minus sign.

Equinox Products Inc. Retained Earnings Statement For the Year Ended December 31, 20Y8

3. Prepare a balance sheet. Accounts that cause decreases in assets should be entered as negative amounts by using a minus sign.

Equinox Products Inc. Balance Sheet December 31, 20Y8
Assets
Current assets:
Total current assets
Property, plant and equipment:
Total property, plant and equipment
Intangible assets:
Total assets
Liabilities
Current liabilities:
Total current liabilities
Total liabilities
Stockholders Equity
Paid-in capital:
Total paid-in capital
Total stockholders equity
Total liabilities and Stockholders Equity