Selected transactions completed by Equinox Products Inc. during the fiscal year ended December 31, 20Y8, were as follows:

Issued 15,000 shares of $20 par common stock at $30, receiving cash.

Issued 4,000 shares of $80 par preferred 5% stock at $100, receiving cash.

Issued $500,000 of 10-year, 5% bonds at 104, with interest payable semiannually.

Declared a quarterly 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.

Paid the cash dividends declared in (D).

Purchased 8,000 shares of treasury common stock at $33 per share.

Declared a $1.00 quarterly cash dividend per share on preferred stock. On the date of record, 20,000 shares of preferred stock had been issued.

Paid the cash dividends to the preferred stockholders.

Sold, at $38 per share, 2,600 shares of treasury common stock purchased in (F).

Recorded the payment of semiannual interest on the bonds issued in (C) and the amortization of the premium for six months. The amortization is determined using the straight-line method.

Instructions

Journalize the selected transactions.

Answer C. Total assets, $13,500,000

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. Prepare a multiple-step income statement for the year ended December 31, 20Y8.

Prepare a retained earnings statement for the year ended December 31, 20Y8.

Prepare a balance sheet in report form as of December 31, 20Y8.

Income statement data:

Advertising expense $ 150,000

Cost of goods sold 3,700,000

Delivery expense 30,000

Depreciation expenseoffice buildings and equipment 30,000

Depreciation expensestore 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 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

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 parcommon stock 886,800

Excess of issue price over parpreferred stock 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 9,319,725

Store buildings and equipment 12,560,000

Treasury stock (5,400 shares of common stock at cost of $33 per share)