The Boston Trading Company, whose accounting year ends on

The Boston Trading Company, whose accounting year ends on December 31, had the following normal balances in its general ledger at December 31:

Cash

$15,000

Accounts Receivable

56,600

Inventory

74,000

Prepaid Insurance

3,000

Office Supplies

4,200

Furniture & Fixtures

21,000

Accumulated Depreciation - Furn. & Fixtures

7,000

Delivery Equipment

86,000

Accumulated Depreciation - Delivery Equipment

12,000

Accounts Payable

43,000

Long-term Notes Payable

28,000

Common Stock

70,000

Retained Earnings

56,400

Sales Revenue

610,000

Cost of Goods Sold

394,000

Utilities Expense

4,800

Sales Salaries Expense

77,000

Delivery Expense

10,800

Advertising Expense

5,600

Rent Expense

9,400

Office salaries expense

56,000

Income Tax Expense

9,000

During the year, the accounting department prepared monthly statements but no adjusting entries were made in the journals and ledgers. Data for the year-end procedures are as follows:

1. Prepaid insurance, December 31

$1,500

2. Depreciation Expense on furniture and fixtures for year

$2,000

3. Depreciation Expense on delivery equip. for the year

$11,000

4. Salaries Payable, December 31 ($1,800 Sales and $1,200 Office)

$3,000

5. Unused office supplies on December 31

$1,200

Required

a. Record the necessary adjusting entries at December 31.
b. Prepare a multi-step income statement for the year. Combine all the operating expenses into one line on the income statement for selling, general and administrative expenses.

General Journal Debit Credit Date Description Ref. Dec. 31 To record expired insurance. 2 0 31 To record depreciation expense for furniture for the year 0 31 To record depreciation expense for delivery equipment for the year. 0 31 Salaries Expense To record accrued salaries at December 31 0 31 To record office supplies used

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