(Part 1) Selected transactions completed by Equinox Products Inc. during the fis
ID: 2529912 • Letter: #
Question
(Part 1)
Selected transactions completed by Equinox Products Inc. during the fiscal year ended December 31, 2016, were as follows:
Record on journal page 10:
Record on journal page 11:
After all of the transactions for the year ended December 31, 2016, 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. A. Prepare a multiple-step income statement for the year ended December 31, 2016, 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. Enter all amounts as positive numbers EXCEPT in the Other income and expenses. In that section only, enter amounts that represent other expenses as negative numbers using a minus sign. Round earnings per share to the nearest cent. B. Prepare a retained earnings statement for the year ended December 31, 2016.* C. Prepare a balance sheet in report form as of December 31, 2016. * * Read the instructions above each financial statement carefully. They may contain specific instructions for completing the statement.Explanation / Answer
DATE DESCRIPTION DEBIT CREDIT Jan 3, 2018 Cash (15000 shares x $30 per share) $450,000 Common Stock (15000 shares x $20 per share) $300,000 Paid-In Capital in Excess of Par—Common stock $150,000 Feb 15, 2018 Cash (4000 shares × $100 per share) $400,000 Preferred Stock (4000 shares x $80 per share) $320,000 Paid-In Capital in Excess of Par—Preferred stock (4000 x ($100-80)) $80,000 May 1, 2018 Cash ($500,000 x 1.04) $520,000 Bonds Payable $500,000 Premium on Bonds Payable $20,000 May 16, 2018 Cash Dividends (Common) $50,000 Cash Dividends Payable $50,000 (100,000 shares × $0.50 per share) May 16, 2018 Cash Dividends (Preferred) 20000 Cash Dividends Payable (20,000 shares × $1 per share) $20,000 May 26, 2018 Cash Dividends Payable $50,000 Cash $50,000 Jun 1, 2016 Available-for-Sale Investments—solostice Corp $300,150 Cash (7500 shares × $40 per share) + $150 $300,150 Jun 8, 2016 Treasury Stock $264,000 Cash(8000 shares × $33 per share) $264,000 Jun 22, 2016 Investment in pinkberry Co. Stock. 960000 Cash (40,000 shares × $24 per share) $960,000 Jun 30, 2016 Cash Dividends (20,000 shares x $1 per share) $20,000 Cash Dividends Payable $20,000 Jul 11, 2016 Cash Dividends Payable $20,000 Cash $20,000 Aug 27, 2016 Cash $27,500 Investment in pinkberry Co. Stock. $27,500 Oct 1, 2016 Investments—Dream Inc. Bonds $90,000 Interest Receivable $375 Cash $90,375 Oct 7, 2016 Cash (2,600 shares × $38 per share) $98,800 Treasury Stock (2,600 shares × $33 per share) $85,800 Paid-In Capital from Sale of Treasury Stock $13,000 Oct 14, 2016 Cash (4500 shares × $.60 per share) $4,500 Dividend Revenue $4,500 Oct 29, 2016 Cash (1000 shares x $45) $45,000 Gain on Sale of Investment $4,980 Available-for-Sale Investments—Slostice Corp (1,000 shares × ($300,150/7500 shares) $40,020 Oct 31, 2016 Interest Expense $11,500 Premium on Bonds Payable (amortization premium [($20,000/10 years)× ½] 1000 Cash (Semiannual interest payment ($500,000 × 5% × ½) $12,500 Dec 31, 2016 Interest Receivable $1,125 Interest Revenue $1,125 Interest accrued for three months = $90,000 x 5% x 3/12 Dec 31, 2016 Investment in pinkberry Co. Stock. $76,800 Income From pinkberry co.(40,000/125,000 x $240,000) $76,800 Dec 31, 2016 Unrealized Gain (Loss) on Available-for-Sale Investments 6370 Valuation Allowance for Available-for-Sale investments (6500 shares × ($40 – $39.02) $6,370
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