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Multi-step Income Statement and Adjusting Entries Oregon Distributors, whose accounting year ends on December 31, had the following normal balances in its ledger accounts at December 31.

Cash	$45,750
Accounts Receivable	92,000
Inventory	84,400
Prepaid Insurance	7,200
Office Supplies	4,800
Furniture & Fixtures	28,000
Accumulated Depreciation - Furn. & Fixtures	10,800
Delivery Equipment	70,000
Accumulated Depreciation - Delivery Equipment	24,400
Accounts Payable	69,400
Long-term Notes Payable	30,000
Income tax expense	12,000
Common Stock	$125,000
Retained Earnings	42,000
Sales Revenue	1,165,000
Cost of Goods Sold	822,200
Utilities Expense	5,600
Sales Salaries Expense	108,000
Delivery Expense	36,800
Advertising Expense	28,200
Rent Expense	30,000
Office salaries expense	72,000

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	$2,600
2. Depreciation Expense on furniture and fixtures for year	3,000
3. Depreciation Expense on delivery equip. for the year	10,000
4. Salaries Payable, December 31 ($2,000 Sales and $800 Office)	2,800
5. Office Supplies on hand, December 31	1,800

Required

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

Dec.	31	Answer

1	Answer	Answer
		Answer

	Answer	Answer
		To record expired insurance.
	31	Answer

2	Answer	Answer
		Answer

	Answer	Answer
		To record depreciation expense for furniture for the year.
	31	Answer

3	Answer	Answer
		Answer

	Answer	Answer
		To record depreciation expense for delivery equip. for the year.
	31	Sales Salaries Expense	4	Answer	Answer
	Answer

Answer	Answer
	Answer

Answer	Answer
		To record accrued salaries at December 31.
	31	Answer

5	Answer	Answer
		Answer

	Answer	Answer
		To record office supplies used.

b. Do not use negative signs with your answers.

Answer

$Answer

Answer

Answer
Gross Profit on Sales	Answer
Operating Expenses
Answer

Answer
Income before Income Taxes	Answer
Answer

Answer
Net Income	$ Answer