Comprehensive Problem 4 Part 1: Selected transactions completed by Equinox Products Inc. during the fiscal year ended December 31, 2018, were as follows: 1. Journalize the selected transactions. If no entry is required, select "No entry required" from the dropdown and leave the amount boxes blank. If an amount box does not require an entry, leave it blank. a. Issued 15,000 shares of $20 par common stock at $30, receiving cash. Description Cash Common Stock Paid-In Capital in Excess of Par-Common Stock Debit Credit 450,000 300,000 150,000 b. Issued 4,000 shares of $80 par preferred 5% stock at $100, receiving cash. Description Cash Preferred Stock Paid-In Capital in Excess of Par-Preferred Stock Accounting numeric field 400,000 320,000 80,000 c. Issued $500,000 of 10-year, 5% bonds at 104, with interest payable semiannually. Cash Description Bonds Payable Premium on Bonds Payable Debit 520,000 Credit 500,000 20,000 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. Journalize the common stock and the preferred stock entries separately. Description Debit Credit Cash Dividends 50,000 Cash Dividends Payable 50,000 Common stock Cash Dividends 20,000 Cash Dividends Payable 20,000 Preferred stock e. Paid the cash dividends declared in (d). Description Cash Dividends Payable Cash Debit Credit 70,000 70,000 f. Purchased 8,000 shares of treasury common stock at $33 per share. Description Debit Credit Paid-In Capital from Sale of Treasury Stock 300,150 Cash 300,150 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. Description Credit Stock Dividends Debit Cash h. Paid the cash dividends to the preferred stockholders. Description Cash Cash Debit Credit i. Sold, at $38 per share, 2,600 shares of treasury common stock purchased in (f). Description Cash Cash Cash Debit Credit 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. Description Bonds Payable Debit Credit Bonds Payable Bonds Payable 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, 2018, 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. Unless otherwise stated, assume a December 31 balance after adjusting entries. Income statement data: Advertising expense Cost of goods sold $150,000 3,700,000 Delivery expense 30,000 Depreciation expense-office buildings and equipment 30,000 Depreciation expense-store buildings and equipment 100,000 Income tax expense 140,500 Interest expense 21,000 Interest revenue 30,000 Miscellaneous administrative expense Miscellaneous selling expense 7,500 14,000 Office rent expense Office salaries expense Office supplies expense Sales Sales commissions 50,000 170,000 10,000 5,313,000 185,000 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; 85,000 shares issued, 94,600 outstanding), January 1, 20Y8 1,700,000 Dividends: Cash dividends for common stock Cash dividends for preferred stock Goodwill 155,120 100,000 700,000 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 0 Paid-in capital from sale of treasury stock, January 1, 2018 Paid-in capital in excess of par-common stock, January 1, 20Y8 Paid-in capital in excess of par-preferred stock, January 1, 20Y8 Preferred 5% stock, $80 par (30,000 shares authorized; 16,000 shares issued), January 1, 2018 Premium on bonds payable Prepaid expenses Retained earnings, January 1, 2018 Store buildings and equipment Treasury stock, January 1, 2018 736,800 70,000 1,280,000 19,000 27,400 8,197,220 12,560,000 0 a. Prepare a multiple-step income statement for the year ended December 31, 20Y8. Equinox Products Inc. Income Statement For the Year Ended December 31, 20Y8 Sales Cost of goods sold Gross profit Operating expenses: Selling expenses: Sales salaries expense Sales commissions $$ 385,000 185,000 Advertising expense 150,000 Depreciation expense-store buildings and equipment 100,000 Delivery expense 30,000 Store supplies expense 21,000 Miscellaneous selling expense 14,000 885,000 Administrative expenses: Office salaries expense Office rent expense Depreciation expense-office buildings and equipment Office supplies expense Miscellaneous administrative expense $$ 170,000 50,000 30,000 10,000 7,500 267,500 5,313,000 3,700,000 1,613,000 Total operating expenses Operating income Other revenue and expense: Interest revenue Interest expense Income before income tax Income tax 30,000 1,152,500 460,500 21,000 9,000 469,500 140,500 Net income 329,000 b. Prepare a statement of stockholders' equity for the year ended December 31, 2018. Decreases in equity and purchase should be entered as negative amounts by usin a minus sign. If your answer is zero, enter "0". Paid-In Capital in Excess of Par- Preferred Preferred Stock Stock Equinox Products Inc. Statement of Stockholders' Equity For the Year Ended December 31, 2018 Paid-In Capital in Excess of Par- Common Paid-In Capital Common Stock Stock from Sale of Treasury Stock Retained Earnings Treasury Stock Total $ $ $ $ c. Prepare a balance sheet in report form as of December 31, 2018. Equinox Products Inc. Balance Sheet December 31, 2018 Assets Current assets: Total current assets Property, plant, and equipment: Total property, plant, and equipment Intangible assets: Total assets Current liabilities: Total current liabilities Long-term liabilities: $$ $$ Liabilities $ $ $ $ $ $ $$ $$ Accounting numeric field Current liabilities: Total current liabilities Long-term liabilities: Total liabilities Liabilities Stockholders' Equity Paid-in capital: $$ Total paid-in capital Total stockholders' equity Total liabilities and Stockholders' Equity $$ $$ $$ $ $ $$ $ $