a.  Issued 15,000 shares of $20 par common stock at $30, receiving cash. Descr D C                     b.  Issued 4,000 shares of $80 par preferred 5% stock at $100, receiving cash. Descr D C                     c.  Issued $500,000 of 10-year, 5% bonds at 104, with interest payable semiannually. Descr D C                     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. Descr D C                                             e.  Paid the cash dividends declared in (d). Descr D C               f.  Purchased 8,000 shares of treasury common stock at $33 per share. Descr D C               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. Descr D C               h.  Paid the cash dividends to the preferred stockholders. Descr D C               i.  Sold, at $38 per share, 2,600 shares of treasury common stock purchased in (f). Descr D C                     j.  Recorded the payment of semiannual interest on the bonds issued in (c) and the amortization of the premium for 6 months. The amortization is determined using the straight-line method. Descr D C                   You must complete part 1 before part 2. After all of the transactions for the year ended Dec 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 Dec 31 balance after adjusting entries. Income statement data:     Advertising expense   $150,000 Cost of goods sold   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 Misc administrative expense   7,500 Misc 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 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), Jan 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 (Dec 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, Jan 1, 20Y8   0 Paid-in capital in excess of par—common stock, Jan 1, 20Y8   736,800 Paid-in capital in excess of par—preferred stock, Jan 1, 20Y8   70,000 Preferred 5% stock, $80 par (30,000 shares authorized;   16,000 shares issued), Jan 1, 20Y8   1,280,000 Premium on bonds payable   19,000 Prepaid expenses   27,400 Retained earnings, Jan 1, 20Y8   8,197,220 Store buildings and equipment   12,560,000 Treasury stock, Jan 1, 20Y8   0 a. Prepare a multiple-step income statement for the year ended Dec 31, 20Y8. Equinox Products Inc. Income Statement For the Year Ended Dec 31, 20Y8 Sales     $         Gross profit     $ Operating expenses:       Selling expenses:           $                                                              $   Administrative expenses:           $                                              Total operating expenses       Operating income     $ Other revenue and expense:           $           Income before income tax     $ Income tax       Net income     $ b. Prepare a statement of stockholders’ equity for the year ended Dec 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 Dec. 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   $ $ $ $ $ $ $ $                                                                                                               $ $ $ $ $ $ $ $ c. Prepare a balance sheet in report form as of Dec 31, 20Y8. Equinox Products Inc. Balance Sheet Dec 31, 20Y8 Assets Current assets:           $     $                                               Total current assets     $ Property, plant, and equipment:         $                 $     $                       Total property, plant, and equipment       Intangible assets:               Total assets     $         Liabilities Current liabilities:           $             Total current liabilities     $ Long-term liabilities:           $           Total liabilities     $ Stockholders’ Equity Paid-in capital:   $                 $     $                               Total paid-in capital   $                   Total stockholders’ equity       Total liabilities and Stockholders’ Equity     $

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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a.  Issued 15,000 shares of $20 par common stock at $30, receiving cash.

Descr D C
     
     
     

 

b.  Issued 4,000 shares of $80 par preferred 5% stock at $100, receiving cash.

Descr D C
     
     
     

 

c.  Issued $500,000 of 10-year, 5% bonds at 104, with interest payable semiannually.

Descr D C
     
     
     

 

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.

Descr D C
     
     
     
     
     
     
     

 

e.  Paid the cash dividends declared in (d).

Descr D C
     
     

 

f.  Purchased 8,000 shares of treasury common stock at $33 per share.

Descr D C
     
     

 

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.

Descr D C
     
     

 

h.  Paid the cash dividends to the preferred stockholders.

Descr D C
     
     

 

i.  Sold, at $38 per share, 2,600 shares of treasury common stock purchased in (f).

Descr D C
     
     
     

 

j.  Recorded the payment of semiannual interest on the bonds issued in (c) and the amortization of the premium for 6 months. The amortization is determined using the straight-line method.

Descr D C
     
     
     

You must complete part 1 before part 2.

After all of the transactions for the year ended Dec 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 Dec 31 balance after adjusting entries.

Income statement data:    
Advertising expense   $150,000
Cost of goods sold   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
Misc administrative expense   7,500
Misc 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 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), Jan 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 (Dec 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, Jan 1, 20Y8   0
Paid-in capital in excess of par—common stock, Jan 1, 20Y8   736,800
Paid-in capital in excess of par—preferred stock, Jan 1, 20Y8   70,000
Preferred 5% stock, $80 par (30,000 shares authorized;
  16,000 shares issued), Jan 1, 20Y8
  1,280,000
Premium on bonds payable   19,000
Prepaid expenses   27,400
Retained earnings, Jan 1, 20Y8   8,197,220
Store buildings and equipment   12,560,000
Treasury stock, Jan 1, 20Y8   0

a. Prepare a multiple-step income statement for the year ended Dec 31, 20Y8.

Equinox Products Inc.
Income Statement
For the Year Ended Dec 31, 20Y8
Sales     $
       
Gross profit     $
Operating expenses:      
Selling expenses:      
    $    
         
         
          
         
         
      $  
Administrative expenses:      
    $    
         
          
         
         
Total operating expenses      
Operating income     $
Other revenue and expense:      
    $  
       
Income before income tax     $
Income tax      
Net income     $

b. Prepare a statement of stockholders’ equity for the year ended Dec 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 Dec. 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
  $ $ $ $ $ $ $ $
                 
                 
                 
                 
                 
                 
  $ $ $ $ $ $ $ $



c. Prepare a balance sheet in report form as of Dec 31, 20Y8.

Equinox Products Inc.
Balance Sheet
Dec 31, 20Y8
Assets
Current assets:      
    $  
  $    
       
       
       
       
       
  Total current assets     $
Property, plant, and equipment:      
  $    
       
    $  
  $    
       
       
  Total property, plant, and equipment      
Intangible assets:      
       
Total assets     $
       
Liabilities
Current liabilities:      
    $  
       
  Total current liabilities     $
Long-term liabilities:      
    $  
       
Total liabilities     $
Stockholders’ Equity
Paid-in capital:
  $    
       
    $  
  $    
       
       
       
  Total paid-in capital   $  
       
       
Total stockholders’ equity      
Total liabilities and Stockholders’ Equity     $
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