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 $20,800 Accounts Receivable 90,560 Inventory 116,800 Prepaid Insurance 9,600 Office Supplies 6,720 Furniture Fixtures 33,600 Accumulated Depreciation Furn. & Fixtures 8.000 Delivery Equipment 134,400 Accumulated Depreciation Delivery Equipment 19,200 Accounts Payable 65,600 Long-term Notes Payable 48,000 Common Stock 120,000 Retained Earnings 82,240 Sales Revenue 1,008,000 Cost of Goods Sold 646,400 Utilities Expense 7,680 Sales Salaries Expense 128,000 Delivery Expense 17,280 Advertising Expense 8,960 Rent Expense 23,040 Office Salaries Expense 92,800 Income Tax Expense 14,400 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 $1,200 Depreciation Expense on furniture and fixures for year 1,800 Depreciation Expense on delivery equip. for the year 15,000 3,000 Salaries Payable, December 31 ($1,800 Sales and $1,200 Office) Unused office supplies on December 31 1,000 a. General Journal Debit Description Credit Ref. Date Insurance Expense 8,400 Dec. 31 C 1 Prepaid Insurance 8,400 To record expired insurance Depreciation Expense - Furn iture & Fixtures 31 1,800 Accumulated Depreciation - Furn. & Fixtures 1,800 To record depreciation expense for furniture for the year. 15,000 31 Depreciation Expense - Delivery Equipment 3 Accumulated Depreciation Delivery Equipment 15,000 To record depreciation expense for delivery equipment for the year. 31 Sales Salaries Expense A 1,800 0 Salaries Payable X 1,200 Office Supplies 3,000X To record accrued salaries at December 31. 31 Office Supplies Expense 5 5,720 Office Supplies 5,720 To record office supplies used. b. Do not use negative signs with your answers. BOSTON TRADING COMPANY Income Statement For the Year Ended December 31 Sales Revenue $ 1,008,000 646,400X Cost of Goods Sold Gross Profit on Sales 361,600 Operating Expenses X O Selling, General, and Administrative Expense Income before Income Taxes 14,400 Income Tax Expense $ 0 Net Income