Note: You must complete Comprehensive Problem 4 (Part A) before completing Compr

Question

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 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 Cost of goods sold Delivery expense Depreciation expense-office buildings and equipment Depreciation expense-store buildings and equipment Income tax expense 150,000 3,700,000 30,000 30,000 100,000 140,500 21,000 0,000 7.500 Interest expense Interest revenue Miscellaneous administrative expense

Explanation / Answer

1. A multiple-step Income statement Income Statement For the year ended December 31, 20Y8 Account Titles Amount Revenue: Sales $5,313,000 Less: Cost of goods sold $3,700,000 Gross Profit $1,613,000 Operating Expenses: Selling Expenses: Sales Commission $185,000 Sales Salaries Expenses $385,000 Miscellaneous Selling expenses $14,000 Delivery Expenses $30,000 Advertising Expenses $150,000 Depreciation expense-store building and equipment $100,000 Store supplies expenses $21,000 $885,000 Administrative Expenses: Depreciation expense-office building and equipment $30,000 Miscellaneous administrative expenses $7,500 Office rent expenses $50,000 Office salaries expenses $170,000 Office supplies expenses $10,000 $267,500 Total Operating expenses $1,152,500 Operating Profit $460,500 Non-operating Income/expenses Interest revenue $30,000 Interest expense ($21,000) $9,000 Net income before taxes $469,500 Income tax expense $140,500 Net income $329,000 2. Retained Earning statement for the year ended December 31, 20Y8 Retained Earnings, January 1, 20Y8 $8,197,220 Add: Net income $329,000 Less: Dividend paid ($255,120) Retained Earnings, December 31, 20Y8 $8,271,100 3. Balance Sheet As of December 31, 20Y8 Assets Amount Current Assets: Cash $282,850 Accounts receivable $545,000 Allowance for doubtful accounts ($8,450) $536,550 Inventory $778,000 Interest receivable $1,200 Prepaid expenses $27,400 Total Current Assets $1,626,000 Fixed Assets: Store buildings and equipment $12,560,000 Less: Accumulated Depreciation-store buildings and equipment ($4,126,000) $8,434,000 Office buildings and equipment $4,320,000 Less: Accumulated Depreciation-Office buildings and equipment ($1,580,000) $2,740,000 Total Fixed Assets $11,174,000 Intangible Assets: Goodwill $700,000 Total Assets $13,500,000 Liabilities and Stockholder's Equity Current Liabilities: Accounts payable $194,300 Income tax payable $44,000 Total Current Liabilities $238,300 Long term liabilities: Bonds Payable $500,000 Premium on Bonds Payable $19,000 $519,000 StockHolders' Equity Preferred Stock $1,600,000 Paid in Capital in excess of par-Preferred Stock $150,000 Common Stock $2,000,000 Additional paid in capital-common stock $886,800 Retained Earnings $8,271,100 Treasury Stock ($178,200) Paid in Capital from sale of Treasury Stock $13,000 Total Stockholders' Equity $12,742,700 Total Liabilities & Stockholders Equity $13,500,000

Related Questions

Navigate

• Browse (All)
• Browse N
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.