1. | Journalize the selected transactions. Refer to the Chart of Accounts for exact wording of account titles. Note: on May 16 record the declaration of dividends for common shares and the declaration of dividends for preferred shares as two separate entries. You must complete Comprehensive Problem 4 (Part A) before completing Comprehensive Problem 4 (Part B). | Required: | 2. | 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 | 3. | 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. | Refer to the Chart of Accounts for exact wording of account titles. | | Refer to the Labels and Amount Descriptions for exact wording of text entries. | | | Equinox Products, Inc. | Income Statement | | 1 | | | | | 2 | | | | | 3 | | | | | 4 | | | | | 5 | Selling expenses: | | | | 6 | | | | | 7 | | | | | 8 | | | | | 9 | | | | | 10 | | | | | 11 | | | | | 12 | | | | | 13 | | | | | 14 | Administrative expenses: | | | | 15 | | | | | 16 | | | | | 17 | | | | | 18 | | | | | 19 | | | | | 20 | | | | | 21 | | | | | 22 | | | | | 23 | | | | | 24 | | | | | 25 | | | | | 26 | | | | | 27 | | | | | 28 | | | | | 4. | b. | Prepare a retained earnings statement for the year ended December 31, 20Y8. Decreases in equity as negative amounts. | Refer to the Chart of Accounts for exact wording of account titles. | | Refer to the Labels and Amount Descriptions for exact wording of text entries. | | | Equinox Products, Inc. | Retained Earnings Statement | | 5. | c. | Prepare a balance sheet in report form as of December 31, 20Y8. You are not required to present the details of Preferred and Common Stock (i.e., number of shares authorized, issued and outstanding). | Refer to the Chart of Accounts for exact wording of account titles. | | Refer to the Labels and Amount Descriptions for exact wording of text entries. | | Recall that current assets are to be reported in order of liquidity. | | Report fixed assets and paid-in capital accounts in account-number order. | | Omit the description of bonds and stocks (i.e., percentage rates, due date, number of shares, etc.) | | For those boxes in which you must enter subtracted or negative numbers use a minus sign. | | | Equinox Products, Inc. | Balance Sheet | | 1 | Assets | | | | 2 | | | | | 3 | | | | | 4 | | | | | 5 | | | | | 6 | | | | | 7 | | | | | 8 | | | | | 9 | | | | | 10 | | | | | 11 | | | | | 12 | | | | | 13 | | | | | 14 | | | | | 15 | | | | | 16 | | | | | 17 | | | | | 18 | | | | | 19 | | | | | 20 | | | | | 21 | | | | | 22 | Liabilities | | | | 23 | | | | | 24 | | | | | 25 | | | | | 26 | | | | | 27 | | | | | 28 | | | | | 29 | | | | | 30 | | | | | 31 | | | | | 32 | Stockholders Equity | | | | 33 | | | | | 34 | | | | | 35 | | | | | 36 | | | | | 37 | | | | | 38 | | | | | 39 | | | | | 40 | | | | | 41 | | | | | 42 | | | | | 43 | | | | | 44 | | | | | 45 | | | |