Multi-step Income Statement and Adjusting Entries 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 Date Description Ref. Debit Credit Dec. 31Insurance Expense ,500 Prepaid Insurance ,500 To record expired insurance. 31 Depreciation Expense - Furniture & Fixtures+ 2 2,000 Accumulated Depreciation-Furn. & Fixtures 2,000 To record depreciation expense for furniture for the year. 31 Depreciation Expense Delivery Equipment 11,000 Accumulated Depreciation - Delivery Equipment 11 ,000 To record depreciation expense for delivery equipment for the year. 31 Salaries Expense 4 1,800 Office salaries expense ,200 Salaries Payable 3,000 To record accrued salaries at December 31. 31 Office Supplies Expense 3,000 Office Supplies 3,000 To record office supplies used