Could somepne please correct my work in accounting. 2a. 2b. $ 9,393,605.00 2c. P
ID: 2414439 • Letter: C
Question
Could somepne please correct my work in accounting.
2a.
2b.
$ 9,393,605.00
2c.
PROBLEM INCLUDED BELOW
Comprehensive Problem 4
Selected transactions completed by Equinox Products Inc. during the fiscal year ended December 31, Year 1, were as follows:
Issued 15,000 shares of $20 par common stock at $30, receiving cash.
Issued 4,000 shares of $80 par preferred 5% stock at $100, receiving cash.
Issued $500,000 of 10-year, 5% bonds at 104, with interest payable semiannually.
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.
Paid the cash dividends declared in (d).
Purchased 7,500 shares of Solstice Corp. at $40 per share plus a $150 brokerage commission. The investment is classified as an available-for-sale investment.
Purchased 8,000 shares of treasury common stock at $33 per share.
Purchased 40,000 shares of Pinkberry Co. stock directly from the founders for $24 per share. Pinkberry has 125,000 shares issued and outstanding. Equinox Products Inc. treated the investment as an equity method investment.
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.
Paid the cash dividends to the preferred stockholders.
Received $27,500 dividend from Pinkberry Co. investment in (h).
Purchased $90,000 of Dream Inc. 10-year, 5% bonds, directly from the issuing company, at their face amount plus accrued interest of $375. The bonds are classified as a held-to-maturity long-term investment.
Sold, at $38 per share, 2,600 shares of treasury common stock purchased in (g).
Received a dividend of $0.60 per share from the Solstice Corp. investment in (f).
Sold 1,000 shares of Solstice Corp. at $45, including commission.
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.
Accrued interest for three months on the Dream Inc. bonds purchased in (l).
Pinkberry Co. recorded total earnings of $240,000. Equinox Products recorded equity earnings for its share of Pinkberry Co. net income.
The fair value for Solstice Corp. stock was $39.02 per share on December 31, Year 1. The investment is adjusted to fair value, using a valuation allowance account. Assume that Valuation Allowance for Available-for-Sale Investments had a beginning balance of zero.
Instructions
Journalize the selected transactions.
After all of the transactions for the year ended December 31, Year 1, had been posted [including the transactions recorded in part (1) and all adjusting entries], the data that follows were taken from the records of Equinox Products Inc.
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.
Prepare a retained earnings statement for the year ended December 31, Year 1.
Prepare a balance sheet in report form as of December 31, Year 1.
EQUINOX PRODUCTS INC.Income Statement
For the Year Ended December 31, 2016 ACCOUNT NAME DEBIT CREDIT Sales $ 5,254,000.00 Cost of Merchandise Sold $ 3,700,000.00 Gross Profit $ 1,554,000.00 Operating Expenses: Selling Expenses: Sales Salaries Expense $385,000.00 Sales Commisions $185,000.00 Advertising Expense $150,000.00 Depreciation Expense- Store Buildings and Equipment $100,000.00 Delivery Expense $ 30,000.00 Store Supplies Expense $ 21,000.00 Miscellaneous Selling Expense $ 14,000.00 $ 885,000.00 Administrative Expenses: Office Salaires Expense $170,000.00 Office Rent Expense $ 50,000.00 Depreciation Expense- Office Buildings and Equipment $ 30,000.00 Office Supplies Expense $ 10,000.00 Miiscelleaneous Administrative Expense $ 7,500.00 $ 267,500.00 Total Operating Expenses $ 1,152,500.00 Income from Operations $ 401,500.00 Other Expenses and Income: Dividend Revenue $ 4,500.00 Interest Revenue $ 2,720.00 Income from Pinkberry Co. Investment $ 76,800.00 Gain on Sale of Investment $ 4,980.00 Interest Expense $ (21,000.00) $ 68,000.00 Net Income before Income Tax $ 469,500.00 Income Tax $ (140,500.00) Net Income After Income Tax $ 329,000.00 Earnings Per Share: $ 2.29
Explanation / Answer
EQUINOX PRODUCTS INC. Balance Sheet December 31, 2016 Assets Current Assets Cash 246000 Accounts Receivable 545000 Less:Allowance for doubtful accounts -8450 536550 Merchandise Inventory 778000 Prepaid Expense 27400 Interest Receivable 1125 Available -for-sale investments 260130 Less: Valuation allowance -6500 253630 Total Current Assets 1842705 Property,plant and equipment Office buildings and equipment 4320000 Less: Accumulated Depreciation -1580000 2740000 Stores building and equipment 12560000 Less: Accumulated Depreciation -4126000 8434000 Total Prpoerty, Plant and Equipment 11174000 Other Non-current Assets Goodwill 500000 Investment in PinkBerry Co. Stock 1009300 Investment in Dream Inc.Bonds 90000 Total nin-curent assets 1599300 Total Assets 14616005 Liabilities and stockholders' equity Accounts Payable 194300 Bonds Payable 500000 Premium on bonds payable 19000 Income Tax Payable 44000 Total Liabilities 757300 Preferred Stock 1600000 Common Stock 2000000 Paid in capital in excess of par value - Preferred Stock 150000 Paid ic capital in excess of par value - Common Stock 886800 Paid in capital - treasury stock 13000 Retained earnings 9393605 Treasury Stock -178200 Unrealized gain/(loss) on available-for-sale investments -6500 Total stockholders' equity 13858705 Total Liabilities and stockholders' equity 14616005
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