Question
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,
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.
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.
Equinox Products Inc. Income Statement For the Year Ended December 31, 20Y8 | |||
---|---|---|---|
Sales | |||
Expenses: | |||
Selling expenses: | |||
Total selling expenses | |||
Administrative expenses: | |||
Total administrative expenses | |||
Total operating expenses | |||
Income from operations | |||
Other revenue and expense: | |||
Total other revenue and expense | |||
Income before income tax | |||
Income tax | |||
Net income |
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 |
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