Question
Prepare a multiple-step income statement for the year ended December 31, 20Y5, concluding with earnings per share. In computing earnings per share, assume that the
Prepare a multiple-step income statement for the year ended December 31, 20Y5, concluding with earnings per share. In computing earnings per share, assume that the average number of common shares outstanding was 100,000 and preferred dividends were $100,000. (Round earnings per share to the nearest cent.) Save your calculations and enter the requested amounts below
fter all of the transactions for the year ended December 31, 20Y5, 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.
Income statement data:
Advertising expense $150,000
Cost of merchandise sold 3,700,000
Delivery expense 30,000
Depreciation expenseoffice buildings and equipment 30,000
Depreciation expensestore buildings and equipment 100,000
Gain on sale of investments 4,980
Income from Pinkberry Co. investment 76,800
Income tax expense 142,000
Interest expense 21,000
Interest revenue 8,720
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 expense 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
Available-for-sale investments (at cost) 260,130
Bonds payable, 5%, due in 10 years 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, 20Y5), 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 $1 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, 20Y5 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)
If required, only use the minus sign to indicate loss before income tax, net loss, or a deficit balance in retained
earnings.
Gross profit $
Total selling expenses $
Total administrative expenses $
Total operating expenses $
Income from operations $
Net other expenses and income $
Income tax $
Net income $
Earnings per common share (rounded to the nearest cent) $
Retained earnings, January 1, 20Y5 $
Total current assets $
Investment in Dream Inc. bonds $
Total property, plant, and equipment $
Total assets $
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