Comprehensive Problem 4 Part 2: Note: You must complete part 1 before part 2 Aft

Question

Comprehensive Problem 4 Part 2: Note: You must complete part 1 before part 2 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 below were taken from the records of Equinox Products Inc. Income statement data: Advertising expense Cost of goods sold Delivery expense Depreciation expense-store buildings and equipment Income tax expense Interest expense Interest revenue Miscellaneous administrative expense Miscellaneous selling expense Office rent expense Office salaries expense Office supplies expense $150,000 3,700,000 30,000 30,000 100,000 140,500 21,000 0,000 7,500 14,000 50,000 70,000 10,000

Explanation / Answer

Income Statement For the year ended December 31, 20Y8 Sales $5,313,000 Cost of Goods Sold $3,700,000 Gross Profit $1,613,000 Expenses: Selling expenses Delivery expense $30,000 Depreciation expense-store buildings and equipment $100,000 Sales commission $185,000 Sales salaries expense $385,000 Store supplies expense $21,000 Advertising expenses $150,000 Miscellaneous selling expenses $14,000 Total selling expenses $885,000 Administrative expenses Depreciation expense-office buildings and equipment $30,000 Office rent expense $50,000 Office salaries expense $170,000 Office supplies expense $10,000 Miscellaneous administrative expenses $7,500 Total Administrative expenses $267,500 Total Operating expenses $1,152,500 Income from operation $460,500 Other income and expenses Interest expense $21,000 Interest revenue $30,000 Total other revenue $9,000 Income before tax $469,500 Income tax $140,500 Net profit $329,000 Statement of Retained Earnings For the year ended December 31, 20Y8 Retained Earnings, January 1, 20Y8 8197220 Net income $329,000 Dividends common 155120 Dividends preferred 100000 255120 Changes in Retained Earnings $73,880 Retained Earnings, December 31, 20Y8 $8,271,100 Balance Sheet as of December 31, 20Y8 Assets 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 Property, Plant and equipment: Store building and Equipment $12,560,000 Accumulated Depreciation $4,126,000 $8,434,000 Office Building and Equipment $4,320,000 Accumulated Depreciation $1,580,000 $2,740,000 Total Property, Plant and Equipment $11,174,000 Intangible Assets: Goodwill $700,000 Total Assets $13,500,000 Liabilities 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 Total Liabilities $757,300 Stockholders' Equity Preferred 5% stock $1,600,000 Excess of issue price over par $150,000 Paid in Capital, preferred stock $1,750,000 Common stock $2,000,000 Excess of issue price over par $886,800 Paid in Capital, common stock $2,886,800 From sale of Treasury stock $13,000 Total paid in capital $4,649,800 Retained Earnings $8,271,100 Treasury stock $178,200 Total Stockholder's equity $12,742,700 Total Liabilities and Stockholders' equity $13,500,000

Related Questions

Navigate

• Browse (All)
• Browse C
• Subjects

---

---

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