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, Year 1, had been posted (including the transactions recorded in part all adjusting entries), the data that follows were taken from the records of Equinox Products Inc. Income statement data: Advertising expense Cost of merchandise sold Delivery expense Depreciation expense-office buildings and equipment Depreciation expense-store buildings and equipment $150,000 3,700,000 30,000 30,000 100,000 Dividend revenue 4,500 Gain on sale of investment 4,980 Income from Pinkberry Co. investment 76,800 140,500 Income tax expense Interest expense 21,000 Interest revenue 2,720 Interest revenue Miscellaneous administrative expense 2,720 Miscellaneous selling expense 7,500 Office rent expense 14,000 Office salaries expense 50,000 Office supplies expense 170,000 Sales 10,000 5,254,000 Sales commissions Sales salaries expense 185,000 385,000 Store supplies expense 21,000 $194,300 Retained earnings and balance sheet data: Accounts payable Accounts receivable Accumulated depreciation-office buildings and equipment Accumulated depreciation-store buildings and equipment 545,000 1,580,000 4,126,000 Allowance for doubtful accounts 8,450 Available-for-sale investments (at cost) 260,130 Bonds avable 50% dua 2012 CA nnn Cash Common stock, $20 par (400,000 shares authorized; 100,000 shares issued, 94,600 outstanding) 246,000 2,000,000 Dividends: Cash dividends for common stock Cash dividends for preferred stock 155,120 Goodwill 100,000 500,000 Income tax payable 44,000 Interest receivable 1,125 1,009,300 90,000 778,000 Investment in Pinkberry Co. stock (equity method) Investment in Dream Inc. bonds (long term) Merchandise inventory (December 31, Year 1), at lower of cost (FIFO) or market Office buildings and equipment Pald-in capital from sale of treasury stock Excess of issue price over par-common stock Excess of issue price over par-preferred stock Preferred 5% stock, $80 par (30,000 shares authorized; 20,000 shares issued) Premium on bonds payable Prepaid expenses 4,320,000 13,000 886,800 150,000 1,600,000 19,000 27,400 Retained earnings January 1 Year 1 9 310 725 12,560,000 Store buildings and equipment Treasury stock (5,400 shares of common stock at cost of $33 per share) Unrealized gain (loss) on available-for-sale investments Valuation allowance for available-for-sale investments 178,200 (6,500) (6,500) On your own paper, in the working papers, or using a spreadsheet, prepare the following: a. Prepare a multiple-step income statement for the year ended December 31, Year 1, concluding with earnings per share. In computing earnings per share, assume that the average number of common shares outstanding was 100,000 and preferred dividends were $100,000. (Round earnings per share to the nearest cent.) Save your calculations and enter the requested amounts below. b. Prepare a retained earnings statement for the year ended December 31, Year 1. Save your calculations and enter the requested amounts below. c. Prepare a balance sheet in report form as of December 31, Year 1. Save your calculations and enter the requested amounts below. If required, only use the minus sign to indicate loss before income tax, net loss, or a deficit balance in retained earnings. Chapter 15 Problem