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 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

The Answer is in the image, click to view...

Answered step by step

Verified Expert Solution

Link Copied!

Question

1 Approved Answer

Posted on Mar 12, 2019

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

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