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, 2018, 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 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 $150,000 3,700,000 30,000 30,000 100,000 140,500 21,000 30,000 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 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, 2018 Paid-in capital in excess of par--common stock, January 1, 2048 Paid-in capital in excess of par-preferred stock, January 1, 2018 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 155,120 100,000 700,000 44,000 1,200 778,000 4,320,000 736,800 70,000 1,280,000 19,000 27,400 8,197,220 Prepaid expenses 27,400 Retained earnings, January 1, 2048 8,197,220 Store buildings and equipment 12,560,000 Treasury stock, January 1, 2048 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 5,313,000 Cost of goods sold 3,700,000 Gross profit 1,613,000 Operating expenses: Selling expenses: Sales salaries expense 385,000 Sales commissions 185,000 Advertising expense 150,000 Depreciation expense-store buildings and equipment 100,000 Delivery expense 30,000 Store supplies expense 21,000 Miscellaneous selling expense 14,000 885,000 Administrative expenses: orice salaries expense 170,000 Office rent expense 50,000 Administrative expenses: Office salaries expense 170,000 Office rent expense 50,000 Depreciation expense-office buildings and equipment 30,000 Orice supplies expense 10,000 Miscellaneous administrative expense 7,500 267,500 Total operating expenses 1,152,500 Operating income 460,500 Other revenue and expense: Interest revenue 30,000 Interest expense 21,000 9,000 Income before income tax 469,500 Income tax 140.500 Net income 329,000 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"0" Equinox Products Inc. Statement of Stockholders' Equity For the Year Ended December 31, 2048 Paid-In Capital Pald-In Capital in Excess in Excess of Par- of Par Paid-In Capital Preferred Common from Sale of Retained 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 Pald-In Capital in Excess of Par- Preferred Stock Pald-In Capital In Excess of Par Common Stock Pald-In Capital from Sale of Treasury Stock Retained Earnings Treasu Stock Preferred Stock Common Stock Balances January 1 8,197,220 Issued common stock Issued preferred stock Net Income Cash dividends Sale of treasury stock Purchase of treasury stock Balances, December 31 Jers' equity for the year ended December 31, 2018. Decreases in equity and purchase should be entered as negative amounts by using enter "0". Equinox Products Inc. Statement of Stockholders' Equity For the Year Ended December 31, 20Y8 Pald-In Capital in Excess of Par- Preferred Stock Pald-In Capital In Excess of Par- Common Stock Pald-In Capital from Sale of Treasury Stock Retained Earnings Treasury Stock Preferred Stock Common Stock Total 8,197,220 C. Prepare a balance sheet in report form as of December 31, 2048. Equinox Products Inc. Balance Sheet December 31, 2048 Assets Current assets: Cash Accounts receivable Allowance for doubtful accounts Accounts receivable, net Inventory Interest receivable Prepaid expenses Total current assets Property, plant, and equipment: Store buildings and equipment Accumulated depreciation Store buildings and equipment, net Office buildings and equipment Accumulated depreciation Office buildings and equipment, net value Total property, plant, and equipment Accumulated depreciation Store buildings and equipment, net value Office buildings and equipment Accumulated depreciation Office buildings and equipment, net value Total property, plant, and equipment Intangible assets: Goodwill Total assets Liabilities Current liabilities: Accounts payable Income tax payable Total current liabilities Long-term liabilities: Bonds payable Premium on bonds payable Total liabilities Total liabilities 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