Comprehensive Problem $4$

Part $2$:

Note: You must complete part $1$ before part $2.$

After all of the transactions for the year ended December $31,20$Y$5,$ had been posted $[$including the transactions recorded in part $(1)$ and all adjusting entries$],$ the data that follows were taken from the records of Equinox Products Inc.

Income statement data:

Advertising expense $$150,000$

Cost of merchandise sold $3,700,000$

Delivery expense $30,000$

Depreciation expense$$office buildings and equipment $30,000$

Depreciation expense$$store buildings and equipment $100,000$

Gain on sale of investments $4,980$

Income from Pinkberry Co$.$ investment $76,800$

Income tax expense $142,000$

Interest expense $21,000$

Interest revenue $8,720$

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 $5,254,000$

Sales commissions expense $185,000$

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 $1,580,000$

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 in $10$ years $500,000$

Cash $246,000$

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 $500,000$

Income tax payable $44,000$

Interest receivable $1,125$

Investment in Pinkberry Co$.$ stock $($equity method$)1,009,300$

Investment in Dream Inc. bonds $($long term$)90,000$

Merchandise inventory $($December $31,20$Y$5),$ 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 $886,800$

Excess of issue price over par$$preferred stock $150,000$

Preferred $$1$ stock, $$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 $1,20$Y$59,319,725$

Store buildings and equipment $12,560,000$

Treasury stock $(5,400$ shares of common stock at cost of

$$33$ per share$)178,200$

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 $31,20$Y$5,$ concluding with earnings per share. In computing earnings per share, assume that the average number of common shares 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 $31,20$Y$5.$ Save your calculations and enter the requested amounts below.

c$.$ Prepare a balance sheet in report form as of December $31,20$Y$5.$ 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.