Question
NEED AN INCOME STATEMENT, JOUNRAL, BALANCE SHEET AND RETAINED EARNING STATEMENT Selected transactions completed by Equinox Products Inc. during the fiscal year ended December 31,
NEED AN INCOME STATEMENT, JOUNRAL, BALANCE SHEET AND RETAINED EARNING STATEMENT
Selected transactions completed by Equinox Products Inc. during the fiscal year ended December 31, 2016, were as follows:
Record on journal page 10:
Jan. | 3 | Issued 15,000 shares of $20 par common stock at $30, receiving cash. |
Feb. | 15 | Issued 4,000 shares of $80 par preferred 5% stock at $100, receiving cash. |
May | 1 | Issued $500,000 of 10-year, 5% bonds at 104, with interest payable semiannually. |
16 | Declared a dividend of $0.50 per share on common stock and $1.00 per share on preferred stock. On the date of record, 100,000 shares of common stock were outstanding, no treasury shares were held, and 20,000 shares of preferred stock were outstanding. Journalize this transaction as a single entry. | |
26 | Paid the cash dividends declared on May 16. | |
Jun. | 1 | Purchased 7,500 shares of Solstice Corp. at $40 per share, plus a $150 brokerage commission. The investment is classified as an available-for-sale investment. |
8 | Purchased 8,000 shares of treasury common stock at $33 per share. | |
22 | Purchased 40,000 shares of Pinkberry Co. stock directly from the founders for $24 per share. Pinkberry has 125,000 shares issued and outstanding. Equinox Products Inc. treated the investment as an equity method investment. | |
30 | Declared a $1.00 cash dividend per share on preferred stock. On the date of record, 20,000 shares of preferred stock were outstanding. | |
Jul. | 11 | Paid the cash dividends declared on Jul. 11 to the preferred stockholders. |
Aug. | 27 | Received $27,500 dividend from Pinkberry Co. investment of Jun. 22. |
Record on journal page 11:
Oct. | 1 | Purchased $90,000 of Dream Inc. 10-year, 5% bonds, directly from the issuing company, at their face amount plus accrued interest of $375. The bonds are classified as a held-to-maturity long-term investment. |
7 | Sold, at $38 per share, 2,600 shares of treasury common stock purchased on Jun. 8. | |
14 | Received a dividend of $0.60 per share from the Solstice Corp. investment on Jun. 1. | |
29 | Sold 1,000 shares of Solstice Corp. at $45, including commission. | |
31 | Recorded the payment of semiannual interest on the bonds issued on May 1 and the amortization of the premium for six months. The amortization is determined using the straight-line method. | |
Dec. | 31 | Accrued interest for three months on the Dream Inc. bonds purchased on Oct. 1. |
31 | Pinkberry Co. recorded total earnings of $240,000. Equinox Products recorded equity earnings for its share of Pinkberry Co. net income. | |
31 | The fair value for Solstice Corp. stock was $39.02 per share on December 31, 2016. The investment is adjusted to fair value, using a valuation allowance account. Assume Valuation Allowance for Available-for-Sale Investments had a beginning balance of zero. |
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1. | Journalize the selected transactions. Refer to the Chart of Accounts for exact wording of account titles. | ||||||||
2. | After all of the transactions for the year ended December 31, 2016, 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.
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Income Statement data: | |
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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 |
Dividend revenue | 4,500 |
Gain on sale of investments | 4,980 |
Income from Pinkberry Co. investment | 76,800 |
Income tax expense | 140,500 |
Interest expense | 21,000 |
Interest revenue | 2,720 |
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 | 185,000 |
Sales salaries expense | 385,000 |
Store supplies expense | 21,000 |
Retained earnings and balance sheet data: | |
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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 |
Available-for-sale investments (at cost) | 260,130 |
Bonds payable, 5%, due 2024 | 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, 2016), | |
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 | 886,800 |
-Preferred | 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, 2016 | 9,319,725 |
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) |
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Journal
1. Journalize the selected transactions. Refer to the Chart of Accounts for exact wording of account titles. Scroll down for journal page 11.
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JOURNAL
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Income Statement
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Equinox Products, Inc. |
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Retained Earnings Statement
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Equinox Products, Inc. |
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Balance Sheet
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