Washington Distributors, whose accounting year ends on December 31, had the following normal balances in its ledger accounts at December 31:

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 , was \(\$ 2,800\).

2. Depreciation expense on furniture and fixtures for the year was \(\$ 3,000\).

3. Depreciation expense on delivery equipment for the year was \(\$ 10,000\).

4. Salaries payable, December 31 ( \(\$ 2,300\) sales and \(\$ 800\) office), was \(\$ 3,100\).

5. Office supplies on hand, December 31 , were \(\$ 1,900\).

Required

a. Record the necessary adjusting entries in general journal form 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.

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Cash.... $45,750 Common stock.. 125,000 Accounts receivable. 92,000 Retained earnings ? Inventory.. 84,400 Sales revenue... 1,170,000 Prepaid insurance. 7,200 Cost of goods sold 822,200 Office supplies. 4,800 Utilities expense.. 5,600 Furniture and fixtures 28,000 Sales salaries expense. 108,000 Accumulated depreciation- Delivery expense 37,000 furniture and fixtures.. 10,800 Advertising expense.. 28,200 Delivery equipment.. 70,000 Rent expense. 30,000 Accumulated depreciation- Office salaries expense 72,000 delivery equipment. 24,400 Accounts payable... 69,400 Long-term notes payable. 30,000 Income tax expense. 11,000