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. Unless otherwise stated, assume a December 31 balance after adjusting entries.

Income statement data:
Advertising expense		$150,000
Cost of goods sold		3,700,000
Delivery expense		30,000
Depreciation expenseoffice buildings and equipment		30,000
Depreciation expensestore buildings and equipment		100,000
Income tax expense		140,500
Interest expense		21,000
Interest revenue		30,000
Miscellaneous administrative expense		7,500
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 depreciationoffice buildings and equipment		1,580,000
Accumulated depreciationstore 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		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, January 1, 20Y8		0
Paid-in capital in excess of parcommon stock, January 1, 20Y8		736,800
Paid-in capital in excess of parpreferred stock, January 1, 20Y8		70,000
Preferred 5% stock, $80 par (30,000 shares authorized; 16,000 shares issued), January 1, 20Y8		1,280,000
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, January 1, 20Y8		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			$fill in the blank 1
Cost of goods soldInsurance expenseInventoryStore equipment			fill in the blank 3
Advertising expenseGross profitIncome from operationsRetained earnings			$fill in the blank 5
Operating expenses:
Selling expenses:
Accounts payableSalaries payableSales salaries expenseStore supplies	$fill in the blank 7
Accounts receivableCashInterest revenueSales commissions	fill in the blank 9
Accounts payableAccounts receivableAdvertising expenseCost of goods sold	fill in the blank 11
Accounts receivableCommon stockDepreciation expensestore buildings and equipmentStore supplies	fill in the blank 13
Accounts payableAccounts receivableCost of goods soldDelivery expense	fill in the blank 15
Accounts receivableCommon stockStore suppliesStore supplies expense	fill in the blank 17
CashInventoryMiscellaneous selling expenseSales returns and allowances	fill in the blank 19	$fill in the blank 20
Administrative expenses:
Office salaries expenseRetained earningsSalaries payableSales	$fill in the blank 22
Accounts payableAccounts receivableCost of goods soldOffice rent expense	fill in the blank 24
CashDepreciation expenseoffice buildings and equipmentInventoryPrepaid insurance	fill in the blank 26
Accounts payableAccounts receivableCost of goods soldOffice supplies expense	fill in the blank 28
Advertising expenseMiscellaneous administrative expenseSalesStore supplies expense	fill in the blank 30	fill in the blank 31
Total operating expenses			fill in the blank 32
Operating income			$fill in the blank 33
Other revenue and expense:
Accounts payableAccounts receivableCost of goods soldInterest revenue		$fill in the blank 35
Accounts payableAccounts receivableCost of goods soldInterest expense		fill in the blank 37	fill in the blank 38
Income before income tax			$fill in the blank 39
Income tax			fill in the blank 40
Net income			$fill in the blank 41

b. Prepare a statement of stockholders equity for the year ended December 31, 20Y8. Decreases in equity and purchase should be entered as negative amounts by using a minus sign. If your answer is zero, enter 0.

Equinox Products Inc. Statement of Stockholders' Equity For the Year Ended December 31, 20Y8
	Preferred Stock	Paid-In Capital in Excess of Par Preferred Stock	Common Stock	Paid-In Capital in Excess of Par Common Stock	Paid-In Capital from Sale of Treasury Stock	Retained Earnings	Treasury Stock	Total
Balances, December 31Balances, January 1Cash dividendsIssued common stockNet incomeNet lossPurchase of treasury stockSale of treasury stockStock dividends	$fill in the blank 43	$fill in the blank 44	$fill in the blank 45	$fill in the blank 46	$fill in the blank 47	$fill in the blank 48	$fill in the blank 49	$fill in the blank 50
Balances, December 31Balances, January 1Cash dividendsIssued common stockNet incomeNet lossPurchase of treasury stockSale of treasury stockStock dividends			fill in the blank 52	fill in the blank 53				fill in the blank 54
Balances, December 31Balances, January 1Cash dividendsIssued preferred stockNet incomeNet lossPurchase of treasury stockSale of treasury stockStock dividends	fill in the blank 56	fill in the blank 57						fill in the blank 58
Balances, December 31Balances, January 1Cash dividendsIssued common stockNet incomeNet lossPurchase of treasury stockSale of treasury stockStock dividends						fill in the blank 60		fill in the blank 61
Balances, December 31Balances, January 1Cash dividendsIssued common stockNet incomeNet lossPurchase of treasury stockSale of treasury stockStock dividends						fill in the blank 63		fill in the blank 64
Balances, December 31Balances, January 1Cash dividendsIssued common stockNet incomeNet lossPurchase of treasury stockSale of treasury stockStock dividends					fill in the blank 66		fill in the blank 67	fill in the blank 68
Balances, December 31Balances, January 1Cash dividendsIssued common stockNet incomeNet lossPurchase of treasury stockSale of treasury stockStock dividends							fill in the blank 70	fill in the blank 71
Balances, December 31Balances, January 1Cash dividendsIssued common stockNet incomeNet lossPurchase of treasury stockSale of treasury stockStock dividends	$fill in the blank 73	$fill in the blank 74	$fill in the blank 75	$fill in the blank 76	$fill in the blank 77	$fill in the blank 78	$fill in the blank 79	$fill in the blank 80