Income statement data: Advertising expense Cost of goods sold Delivery expense Depreciation expense-office bulldings and equipment Depreciation expense-store buildings and equipment Income tax expense Interest expense Interest revenue $ 150,000 3,700,000 30,000 30,000 100,000 140,500 21,000 30,000 Miscellaneous administrative expense Miscellaneous selling expense Office rent expense Office salarles expense Office supplies expense 7,500 14,000 50,000 170,000 10,000 Sales 5,313,000 Sales commissions Sales salaries expense Store supplies expense 185,000 385,000 21,000 Retained earnings and balance sheet data: Accounts payable $ 194,300 545,000 Accounts recelvable Accumulated deprecdation-office buldings and equipment Accumulated depreclation-store bulldings and equipment Allowance for doubtful accounts 1,580,000 4,126,000 8,450 Bonds payable, 5%, due in 10 years 500,000 282,850 Cash Common stock, $20 par (400,000 shares authorized; 85,000 shares Issued, 94,600 outstanding), January 1, 20Y8 1,700,000 Dividends: 155,120 100,000 700,000 Cash dividends for common stock Cash dividends for preferred stock Goodwll Income tax payable 44,000 Interest recelvable 1,200 Inventory (December 31, 20Y8), at lower of cost (FIFO) or market Office buldings and equipment Paid-in capital from sale of treasury stock, January 1, 20Y8 Pald-in capital in excess of par-common stock, January 1, 20Y8 Pald-in capital in excess of par-preferred stock, January 1, 20Y8 778,000 4,320,000 736,800 70,000 Preferred 5% stock, $80 par (30,000 shares authorized; 16,000 shares Issued), January 1, 20Y8 Premium on bonds payable Prepald expenses Retained earnings, January 1, 20Y8 Store buildings and equipment Treasury stock, January 1, 20Y8 1,280,000 19,000 27,400 8,197,220 12,560,000

College Accounting (Book Only): A Career Approach

12th Edition

ISBN:9781305084087

Author:Cathy J. Scott

Publisher:Cathy J. Scott

Chapter12: Financial Statements, Closing Entries, And Reversing Entries

Section: Chapter Questions

Problem 3E

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Question

Selected transactions completed by Equinox Products Inc. during the
fiscal year ended December 31, 20Y8, were as follows:
a. Issued 15,000 shares of $20 par common stock at $30, receiving
cash.
b. Issued 4,000 shares of $80 par preferred 5% stock at $100,

receiving cash.
c. Issued $500,000 of 10-year, 5% bonds at 104, with interest
payable semiannually.
d. 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.
e. Paid the cash dividends declared in (d).
f. Purchased 8,000 shares of treasury common stock at $33 per

share
g. 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.
h. Paid the cash dividends to the preferred stockholders.

i. Sold, at $38 per share, 2,600 shares of treasury common stock
purchased in (f).
j. 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
1. Journalize the selected transactions.
2. The data that follow were taken from the records of Equinox
Products Inc. Unless otherwise stated, assume a December 31
balance after adjusting entries. (attached)

a. Prepare a multiple-step income statement for the year ended December 31, 20Y8.
b. Prepare a statement of stockholders' equity for the year ended December 31, 20Y8.

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

Income statement data:
Advertising expense
Cost of goods sold
Delivery expense
Depreciation expense-office bulldings and equipment
Depreciation expense-store buildings and equipment
Income tax expense
Interest expense
Interest revenue
$ 150,000
3,700,000
30,000
30,000
100,000
140,500
21,000
30,000
Miscellaneous administrative expense
Miscellaneous selling expense
Office rent expense
Office salarles expense
Office supplies expense
7,500
14,000
50,000
170,000
10,000
Sales
5,313,000
Sales commissions
Sales salaries expense
Store supplies expense
185,000
385,000
21,000
Retained earnings and balance sheet data:
Accounts payable
$ 194,300
545,000
Accounts recelvable
Accumulated deprecdation-office buldings and equipment
Accumulated depreclation-store bulldings and equipment
Allowance for doubtful accounts
1,580,000
4,126,000
8,450
Bonds payable, 5%, due in 10 years
500,000
282,850
Cash
Common stock, $20 par (400,000 shares authorized;
85,000 shares Issued, 94,600 outstanding), January 1, 20Y8
1,700,000
Dividends:
155,120
100,000
700,000
Cash dividends for common stock
Cash dividends for preferred stock
Goodwll
Income tax payable
44,000
Interest recelvable
1,200
Inventory (December 31, 20Y8), at lower of cost (FIFO) or market
Office buldings and equipment
Paid-in capital from sale of treasury stock, January 1, 20Y8
Pald-in capital in excess of par-common stock, January 1, 20Y8
Pald-in capital in excess of par-preferred stock, January 1, 20Y8
778,000
4,320,000
736,800
70,000
Preferred 5% stock, $80 par (30,000 shares authorized;
16,000 shares Issued), January 1, 20Y8
Premium on bonds payable
Prepald expenses
Retained earnings, January 1, 20Y8
Store buildings and equipment
Treasury stock, January 1, 20Y8
1,280,000
19,000
27,400
8,197,220
12,560,000

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