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)