Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

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

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

https://d2vlcm61l7u1fs.cloudfront.net/media%2Ff49%2Ff49e9885-bd90-43cc-bef4-379a83d16f4c%2Fphpnoz9CL.png

a. Date Dec. 31 31 31 31 To record expired insurance. Description 31 Salaries Expense General Journal To record depreciation expense for furniture for the year. To record depreciation expense for delivery equipment for the year. To record accrued salaries at December 31. To record office supplies used. " 46 4 Ref. 2 3 5 Debit 0 0 0 0 0 0 0 0 0 0 0 Credit 0 0 0 0 0 0 0 0 0 0 0 b. Do not use negative signs with your answers. BOSTON TRADING COMPANY Income Statement For the Year Ended December 31 Gross Profit on Sales Operating Expenses Income before Income Taxes Net Income < < $ 69 0 0 0 0 0 0 0

Step by Step Solution

3.36 Rating (146 Votes )

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Intermediate Accounting

Authors: J. David Spiceland, James Sepe, Mark Nelson

6th edition

978-0077328894, 71313974, 9780077395810, 77328892, 9780071313971, 77395816, 978-0077400163

More Books

Students also viewed these Accounting questions

Question

List the specific functions of a DBMS. AppendixLO1

Answered: 1 week ago

Question

Define depletion and compare it with depreciation.

Answered: 1 week ago