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 Required 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 A Prepare a multiple step income statement for the year ended December 31, 2016, 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 ) B Prepare a retained earnings statement for the year ended December 31, 2016 C Prepare a balance sheet in report form as of December 31, 2016 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 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 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) CHART OF ACCOUNTSEquinox Products Inc General Ledger ASSETS 110 Cash 121 Accounts Receivable 122 Allowance for Doubtful Accounts 131 Merchandise Inventory 132 Interest Receivable 133 Prepaid Expenses 141 Investments Solstice Corp 142 Investment in Pinkberry Co Stock 143 Investment in Dream Inc Bonds 144 Valuation Allowance for Available for Sale Investments 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 361 Unrealized Gain (Loss) on Available for Sale Investments REVENUE 410 Sales 611 Dividend Revenue 621 Interest Revenue 631 Income from Pinkberry Co 641 Gain on Sale of Investments EXPENSES 511 Cost of Merchandise 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 Equipment 552 Depreciation Expense Office Equipment 591 Miscellaneous Selling Expense 592 Miscellaneous Administrative Expense 710 Interest Expense 731 Loss on Sale of Investments Labels Current assets Current liabilities December 31, 2016 For the Year Ended December 31, 2016 Intangible assets Investments Less dividends Long term liabilities Operating expenses Other income and expenses Paid in capital Add dividends Property, plant, and equipment Amount Descriptions Available for sale investments Decrease in retained earnings Excess of issue price over par Gross profit Income before income tax Income from operations Increase in retained earnings Miscellaneous selling expense Net income Net loss Retained earnings, January 1, 2016 Retained earnings, December 31, 2016 Sales commissions Sales salaries expense 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 Unamortized premium Unamortized discount

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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

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.

Required:

Journalize the selected transactions. Refer to the Chart of Accounts for exact wording of account titles.

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.

Prepare a multiple-step income statement for the year ended December 31, 2016, 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.)*

Prepare a retained earnings statement for the year ended December 31, 2016.*

Prepare a balance sheet in report form as of December 31, 2016. *

*	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 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:
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)

CHART OF ACCOUNTSEquinox Products Inc.General Ledger

	ASSETS
110	Cash
121	Accounts Receivable
122	Allowance for Doubtful Accounts
131	Merchandise Inventory
132	Interest Receivable
133	Prepaid Expenses
141	Investments-Solstice Corp.
142	Investment in Pinkberry Co. Stock
143	Investment in Dream Inc. Bonds
144	Valuation Allowance for Available-for-Sale Investments
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
361	Unrealized Gain (Loss) on Available-for-Sale Investments

	REVENUE
410	Sales
611	Dividend Revenue
621	Interest Revenue
631	Income from Pinkberry Co.
641	Gain on Sale of Investments

	EXPENSES
511	Cost of Merchandise 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 Equipment
552	Depreciation Expense-Office Equipment
591	Miscellaneous Selling Expense
592	Miscellaneous Administrative Expense
710	Interest Expense
731	Loss on Sale of Investments

Labels
Current assets
Current liabilities
December 31, 2016
For the Year Ended December 31, 2016
Intangible assets
Investments
Less dividends
Long-term liabilities
Operating expenses
Other income and expenses
Paid-in capital
Add dividends
Property, plant, and equipment
Amount Descriptions
Available-for-sale investments
Decrease in retained earnings
Excess of issue price over par
Gross profit
Income before income tax
Income from operations
Increase in retained earnings
Miscellaneous selling expense
Net income
Net loss
Retained earnings, January 1, 2016
Retained earnings, December 31, 2016
Sales commissions
Sales salaries expense
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
Unamortized premium
Unamortized discount