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	$36,080
Accounts Receivable	101,200
Inventory	90,200
Prepaid Insurance	7,920
Office Supplies	5,280
Furniture & Fixtures	30,800
Accumulated Depreciation - Furn. & Fixtures	11,880
Delivery Equipment	77,000
Accumulated Depreciation - Delivery Equipment	26,840
Accounts Payable	76,340
Long-term Notes Payable	33,000
Common Stock	110,000
Retained Earnings	46,200
Sales Revenue	1,269,400
Cost of Goods Sold	903,320
Utilities Expense	9,460
Sales Salaries Expense	119,000
Delivery Expense	40,480
Advertising Expense	28,820
Rent Expense	33,000
Income Tax Expense	12,100
Office Salaries Expense	79,000

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:

Prepaid Insurance, December 31	$2,400
Depreciation Expense on furniture and fixures for year	2,100
Depreciation Expense on delivery equip. for the year	11,000
Salaries Payable, December 31	1,600
Office Supplies on hand, December 31	1,800

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.

General Journal
Date		Description	Ref.	Debit	Credit
Dec.	31	AnswerAccounts PayableAccounts ReceivableAccumulated Depreciation - Furn. & FixturesCashCommon StockCost of Goods SoldAccumulated Depreciation - Delivery EquipmentDepreciation Expense - Delivery EquipmentDepreciation Expense - Furniture & FixturesFurniture & FixturesIncome Tax ExpenseInsurance ExpenseInventoryLong-Term Notes PayableOffice SuppliesOffice Supplies ExpensePrepaid InsuranceRetained EarningsSales Salaries ExpenseSalaries PayableSales RevenueSelling, General and Administrative Expenses	1	Answer	Answer
		AnswerAccounts PayableAccounts ReceivableAccumulated Depreciation - Furniture & FixturesCashCommon StockCost of Goods SoldAccumulated Depreciation - Delivery EquipmentDepreciation Expense - Delivery EquipmentDepreciation Expense - Furniture & FixturesFurniture & FixturesIncome Tax ExpenseInsurance ExpenseInventoryLong-Term Notes PayableOffice SuppliesOffice Supplies ExpensePrepaid InsuranceRetained EarningsSales Salaries ExpenseSalaries PayableSales RevenueSelling, General and Administrative Expenses		Answer	Answer
		To record expired insurance.
	31	AnswerAccounts PayableAccounts ReceivableAccumulated Depreciation - Furn. & FixturesCashCommon StockCost of Goods SoldAccumulated Depreciation - Delivery EquipmentDepreciation Expense - Delivery EquipmentDepreciation Expense - Furniture & FixturesFurniture & FixturesIncome Tax ExpenseInsurance ExpenseInventoryLong-Term Notes PayableOffice SuppliesOffice Supplies ExpensePrepaid InsuranceRetained EarningsSales Salaries ExpenseSalaries PayableSales RevenueSelling, General and Administrative Expenses	2	Answer	Answer
		AnswerAccounts PayableAccounts ReceivableAccumulated Depreciation - Furn. & FixturesCashCommon StockCost of Goods SoldAccumulated Depreciation - Delivery EquipmentDepreciation Expense - Delivery EquipmentDepreciation Expense - Furniture & FixturesFurniture & FixturesIncome Tax ExpenseInsurance ExpenseInventoryLong-Term Notes PayableOffice SuppliesOffice Supplies ExpensePrepaid InsuranceRetained EarningsSales Salaries ExpenseSalaries PayableSales RevenueSelling, General and Administrative Expenses		Answer	Answer
		To record depreciation expense for furniture for the year.
	31	AnswerAccounts PayableAccounts ReceivableAccumulated Depreciation - Furn. & FixturesCashCommon StockCost of Goods SoldAccumulated Depreciation - Delivery EquipmentDepreciation Expense - Delivery EquipmentDepreciation Expense - Furniture & FixturesFurniture & FixturesIncome Tax ExpenseInsurance ExpenseInventoryLong-Term Notes PayableOffice SuppliesOffice Supplies ExpensePrepaid InsuranceRetained EarningsSales Salaries ExpenseSalaries PayableSales RevenueSelling, General and Administrative Expenses	3	Answer	Answer
		AnswerAccounts PayableAccounts ReceivableAccumulated Depreciation - Furn. & FixturesCashCommon StockCost of Goods SoldAccumulated Depreciation - Delivery EquipmentDepreciation Expense - Delivery EquipmentDepreciation Expense - Furniture & FixturesFurniture & FixturesIncome Tax ExpenseInsurance ExpenseInventoryLong-Term Notes PayableOffice SuppliesOffice Supplies ExpensePrepaid InsuranceRetained EarningsSales Salaries ExpenseSalaries PayableSales RevenueSelling, General and Administrative Expenses		Answer	Answer
		To record depreciation expense for delivery equip. for the year.
	31	Sales Salaries Expense	4	Answer	Answer
		AnswerAccounts PayableAccounts ReceivableAccumulated Depreciation - Furn. & FixturesCashCommon StockCost of Goods SoldAccumulated Depreciation - Delivery EquipmentDepreciation Expense - Delivery EquipmentDepreciation Expense - Furniture & FixturesFurniture & FixturesIncome Tax ExpenseInsurance ExpenseInventoryLong-Term Notes PayableOffice SuppliesOffice Supplies ExpensePrepaid InsuranceRetained EarningsOffice Salaries ExpenseSalaries PayableSales RevenueSelling, General and Administrative Expenses		Answer	Answer
		AnswerAccounts PayableAccounts ReceivableAccumulated Depreciation - Furn. & FixturesCashCommon StockCost of Goods SoldAccumulated Depreciation - Delivery EquipmentDepreciation Expense - Delivery EquipmentDepreciation Expense - Furniture & FixturesFurniture & FixturesIncome Tax ExpenseInsurance ExpenseInventoryLong-Term Notes PayableOffice SuppliesOffice Supplies ExpensePrepaid InsuranceRetained EarningsSales Salaries ExpenseSalaries PayableSales RevenueSelling, General and Administrative Expenses		Answer	Answer
		To record accrued salaries at December 31.
	31	AnswerAccounts PayableAccounts ReceivableAccumulated Depreciation - Furn. & FixturesCashCommon StockCost of Goods SoldAccumulated Depreciation - Delivery EquipmentDepreciation Expense - Delivery EquipmentDepreciation Expense - Furniture & FixturesFurniture & FixturesIncome Tax ExpenseInsurance ExpenseInventoryLong-Term Notes PayableOffice SuppliesOffice Supplies ExpensePrepaid InsuranceRetained EarningsSales Salaries ExpenseSalaries PayableSales RevenueSelling, General and Administrative Expenses	5	Answer	Answer
		AnswerAccounts PayableAccounts ReceivableAccumulated Depreciation - Furn. & FixturesCashCommon StockCost of Goods SoldAccumulated Depreciation - Delivery EquipmentDepreciation Expense - Delivery EquipmentDepreciation Expense - Furniture & FixturesFurniture & FixturesIncome Tax ExpenseInsurance ExpenseInventoryLong-Term Notes PayableOffice SuppliesOffice Supplies ExpensePrepaid InsuranceRetained EarningsSales Salaries ExpenseSalaries PayableSales RevenueSelling, General and Administrative Expenses		Answer	Answer
		To record office supplies used.

b. Do not use negative signs with your answers.

OREGON DISTRIBUTORS Income Statement For the Year Ended December 31
AnswerSales RevenueCost of Goods SoldSelling, General, and Administrative ExpenseIncome Tax Expense	$Answer
AnswerSales RevenueCost of Goods SoldSelling, General, and Administrative ExpenseIncome Tax Expense	Answer
Gross Profit on Sales	Answer
Operating Expenses
AnswerSales RevenueCost of Goods SoldSelling, General, and Administrative ExpenseIncome Tax Expense	Answer
Income before Income Taxes	Answer
AnswerSales RevenueCost of Goods SoldSelling, General, and Administrative ExpenseIncome Tax Expense	Answer
Net Income	$Answer