Income Statement data: Retained earnings and balance sheet data: Required: 1. Jo
ID: 2496602 • Letter: I
Question
Income Statement data:
Retained earnings and balance sheet data:
Required: 1. Journalize the selected transactions. Refer to the Chart of Accounts for exact wording of account titles. 2. 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. (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
Preferred dividends = $100000
Net Profit = $329000
Earnings available to Equity Shareholders
= Net Profit - Preferred Dividends
= $329000 - $100000
= $229000
Number of common shares = 100000
Earnings per share = Earnings available / Number of Shares
= 229000 / 100000
= $2.29
Requirement 1 Journal Entries for the year ended December 31, 2016 Advertising Expenses a/c Dr 150000 To Cash a/c 150000 Cost of merchandise sold a/c Dr 3700000 To Cash a/c 3700000 Delivery Expense a/c Dr 30000 To Cash a/c 30000 Depreciation Expense - Office Buildings & Equipment Dr 30000 To Accumulated Depreciation - Office Buildings & Equipment 30000 Depreciation Expense - Store Buildings & Equipment Dr 100000 To Accumulated Depreciation - Store Buildings & Equipment 100000 Cash a/c Dr 4500 To Dividend Revenue 4500 Cash a/c Dr 4980 To Gain on sale of investments 4980 Cash a/c Dr 76800 To Income from Pinkberry Co Investment 76800 Income Tax Expense a/c Dr 140500 To Cash a/c 140500 Interest Expense a/c Dr 21000 To Cash a/c 21000 Cash a/c Dr 2720 To Interest Revenue 2720 Miscellaneous Administrative Expense a/c Dr 7500 To Cash a/c 7500 Miscellaneous Selling Expense a/c Dr 14000 To Cash a/c 14000 Office Rent Expense a/c Dr 50000 To Cash a/c 50000 Office Salaries Expense a/c Dr 170000 To Cash a/c 170000 Office Supplies Expense a/c Dr 10000 To Cash a/c 10000 Cash a/c Dr 5254000 To Sales a/c 5254000 Sales Commission a/c Dr 185000 To Cash a/c 185000 Sales Salaries Expense a/c Dr 385000 To Cash a/c 385000 Store Supplies Expense a/c Dr 21000 To Cash a/c 21000