Jan.
3
Issued 15,000 shares of $20 $20 par par common common stock at stock at $30, receiving cash.
Feb.
15
Issued 4,000 shares of $80 par preferred 5% stock stock at at $100, receiving cash.
May
1
Issued $500,000 of 10-year, 5% bonds at 104, with interest payable semiannually.
16
Declared a quarterly dividend of $0.50 per share on common stock and $1.00 per share on preferred on preferred stock . On the date of record, 100,000 shares of common stock were outstanding outstanding,, no treasury shares were held, and 20,000 shares of preferred stock were outstanding.
Jun.
26
Paid the cash dividends declared on May 16.
8
Purchased 8,000 shares of treasury common stock at $33 per share.
30
Declared a $1.00 quarterly quarterly cash dividend per share on preferred stock. On the date of record, 20,000 shares of preferred stock had been issued.
Jul.
11
Paid the cash dividends to the preferred stockholders.
Record on journal page 11:
Oct.
7
Sold, at $38 per share, 2,600 shares of treasury common stock purchased on Jun. 8.
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.
Required:
1.
Journalize the selected transactions. Refer to the Chart of Accounts for exact wording of account titles. Note: on May 16 record the th e declaration of dividends for common shares and the declaration of dividends for preferred p referred shares as two separate entries.
Note:
You must complete Comprehensive Problem 4 (Part A) before completing Comprehensive Problem 4 (Part B).
Required:
1.
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 ositive numbers EXCEPT in the Other revenue and
Required:
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-
30,000
office buildings and equipment Depreciation expense-
100,000
store buildings and equipment Income tax expense
140,500
Interest expense
21,000
Interest revenue
30,000
Miscellaneous administrative
7,500
expense 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 depreciation — office buildings and equipment
1,580,000
Accumulated depreciation — store 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
