Selected transactions completed by Everyday Products Inc. during the fiscal

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Selected transactions completed by Everyday Products Inc. during the fiscal year ending December 31, 2012, were as follows:

a. Issued 12, 500 shares of $25 par common stock at $32, receiving cash.

b. issued 2,000 shares of $100 par preferred 5% stock at $105, receiving cash.

c. Issued $400,000 of 10-year, 6% bonds at 105, with interest payable semiannually.

d. Declared a quarterly dividend of $0.45 per share on common stock and $1.25 per share on preferred stock. On the data of record, 85,000 shares of common stock were outstanding, no treasury share were held, and 17,000 shares of preferred stock were outstanding.

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

f. Purchased 5,500 shares of kress Corp. at $22 per share, plus a $275 brokerage commission. The investment is classified as an available-for-sale investment.

g. Purchased 6,500 shares of treasury common stock at $35 per share.

h. Purchased 36,000 shares of Lifecare Co. stock directly from the founders for $18 per share. Lifecare has 112,500 shares issued and outstanding. Everyday products Inc. treated the investment as an equity method investment.

i. Declared a 2% stock dividend on common stock and a $1.25 quarterly cash dividend per share on preferred stock. On the date of declaration, the market value of the common stock was $40 per share. On the date of record, 85,000 shares of common stock had been issued, 6,500 shares of treasury common stock were held, and 17,000 shares of preferred
stock had been issued.

j. Issued the stock certificates for the stock dividends declared in (h) and paid the cash dividends to the preferred stockholders.

k. Received $24,500 dividend from Lifecare Co, investment in (h)

and so on ...

Instructions

1. Journalize the selected transactions.

2. After all of the transactions for the year ended December 31, 2012, had been posted [including the transactions recorded in part (1) and all adjusting entries], the data on the following page were taken from the records of Everyday Products Inc.

a. Prepare a multiple-step income statement for the year ended December 31, 2012, concluding with earnings per share. In computing earnings per share, assume that the average number of common shares outstanding was 84,000 and preferred dividends were $85,000. (Round earnings per share to the nearest cent.)

b. Prepare a retained earnings statement for the year ended December 31, 2012.

c. Prepare a balance sheet in report form as of December 31, 2012.

Accounting 24th edition.