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Note: You must complete Comprehensive Problem 4 (Part A) before completing Comprehensive Problem 4 (Part B). Required: 1. After all of the transactions for the

Note: You must complete Comprehensive Problem 4 (Part A) before completing Comprehensive Problem 4 (Part B).

Required:
1. 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 that follow were taken from the records of Equinox Products Inc.
a. Prepare a multiple-step income statement for the year ended December 31, 20Y8. Enter all amounts as positive numbers EXCEPT in the Other revenue and expense section. In that section only, enter amounts that represent other expenses as negative numbers using a minus sign.
b. Prepare a retained earnings statement for the year ended December 31, 20Y8.*
c. Prepare a balance sheet in report form as of December 31, 20Y8. *
* Read the instructions above each financial statement carefully. They may contain specific instructions for completing the statement.

Income Statement data:

Advertising expense $ 150,000
Cost of goods sold 3,700,000
Delivery expense 30,000
Depreciation expense-office buildings and equipment 30,000
Depreciation expense-store 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 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, 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

CHART OF ACCOUNTS
Equinox Products, Inc.
General Ledger
ASSETS
110 Cash
121 Accounts Receivable
122 Allowance for Doubtful Accounts
131 Inventory
132 Interest Receivable
133 Prepaid Expenses
181 Store Buildings and Equipment
182 Accumulated Depreciation-Store Buildings and Equipment
183 Office Buildings and Equipment
184 Accumulated Depreciation-Office Buildings and Equipment
191 Goodwill
LIABILITIES
211 Accounts Payable
221 Income Tax Payable
225 Cash Dividends Payable
251 Bonds Payable
252 Discount on Bonds Payable
253 Premium on Bonds Payable
EQUITY
311 Preferred Stock
312 Paid-in Capital in Excess of Par-Preferred Stock
321 Common Stock
322 Paid-in Capital in Excess of Par-Common Stock
331 Retained Earnings
341 Cash Dividends
351 Treasury Stock
352 Paid-in Capital from Sale of Treasury Stock
REVENUE
410 Sales
621 Interest Revenue
EXPENSES
511 Cost of Goods Sold
512 Bad Debt Expense
520 Sales Salaries Expense
521 Sales Commissions
522 Office Salaries Expense
531 Advertising Expense
532 Delivery Expense
537 Store Supplies Expense
538 Office Supplies Expense
539 Office Rent Expense
541 Income Tax Expense
551 Depreciation Expense-Store Buildings and Equipment
552 Depreciation Expense-Office Buildings and Equipment
591 Miscellaneous Selling Expense
592 Miscellaneous Administrative Expense
710 Interest Expense
Labels
Current assets
Current liabilities
December 31, 20Y8
Dividends
For the Year Ended December 31, 20Y8
Intangible assets
Investments
Long-term liabilities
Operating expenses
Other revenue and expense
Paid-in capital
Property, plant, and equipment
Amount Descriptions
Accounts receivable, net
Available-for-sale investments
Change in retained earnings
Excess of issue price over par
From sale of treasury stock
Gross profit
Income before income tax
Income from operations
Miscellaneous selling expense
Net income
Net loss
Office buildings and equipment, net value
Paid-in capital, common stock
Paid-in capital, preferred stock
Retained earnings, January 1, 20Y8
Retained earnings, December 31, 20Y8
Sales commissions
Sales salaries expense
Store buildings and equipment, net value
Store supplies expense
Total administrative expenses
Total assets
Total (before treasury stock)
Total current assets
Total current liabilities
Total liabilities
Total liabilities and stockholders equity
Total long-term liabilities
Total investments
Total operating expenses
Total paid-in capital
Total property, plant, and equipment
Total selling expenses
Total stockholders equity

I AM PUTTING PART 1 THAT IS ALREADY DONE DOWN BELOW!

THANK YOU IN ADVANCE! IM NOT UNDERSTANDING PLEASE HELP!

Page 10 Journal

Date Accounts titles and Explanation Debit ($) Credit ($)
Jan.3 Cash (15,000 * $30) 450,000
Common stock (15,000 * $20) 300,000
Paid-in capital in excess of par-common stock 150,000
(To record issuance of common stock)
Feb.15 Cash (4,000*$100) 400,000
Preferred stock (4,000 * $80) 320,000
Paid-in capital in excess of par-preferred stock 80,000
(To record issuance of preferred stock)
May 1 Cash ($500,000 * 104/100) 520,000
Premium on bonds payable 20,000
Bonds payable 500,000
(To record issuance of bonds payable)
May 16 Cash dividends ($0.50 * 100,000) 50,000
Cash dividends payable 50,000
(To record cash dividends declared on common shares)
May 16 Cash dividends ($1.00 * 20,000) 20,000
Cash dividends payable 20,000
(To record cash dividends declared on preferred shares)
May 26 Cash dividends payable 70,000
Cash (50,000+20,000) 70,000
(To record payment of cash dividends declared)
June 8 Treasury stock (8,000 x*$33) 264,000
Cash 264,000
(To record purchase of treasury stock)
June 30 Cash dividends ($1.00 * 20,000) 20,000
Cash dividends payable 20,000
(To record cash dividends declared on preferred stock)
July 11 Cash dividends payable 20,000
Cash 20,000
(To record payment of cash dividends declared)

Page 11 Journal

Date Accounts titles and Explanation Debit ($) Credit ($)
Oct.7 Cash (2,600 * $38) 98,800
Treasury stock (2,600 * $33) 85,800
Paid-in capital from sale of treasury stock 13,000
(To record sale of treasury stock)
Oct.31 Interest expense 11,500
Premium on bonds payable ($20,000/20) 1,000
Cash ($500,000 * 5% * 6/12) 12,500
(To record semiannual interest payment and amortization of premium)

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