Multi-step Income Statement and Adjusting Entries Washington 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 11,000 Common Stock $125,000 Retained Earnings 7 Sales Revenue 1,170,000 Cost of Goods Sold 822,200 Utilities Expense 5,600 Sales Salaries Expense 108,000 Delivery Expense 37,000 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 $2.800 2. Depreciation Expense on furniture and futures for year 3.000 3. Depreciation Expense on delivery equip for the year 10.000 4. Salaries Payable, December 31(52,300 Sales and 5800 Office 3,100 5. Office Supplies on hand, December 31 1.900 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. Journal Entries Income Statement WASHINGTON DISTRIBUTORS Income Statement For the Year Ended December 31 Sales Revenue $ Cost of Goods Sold Gross Profit on Sales Operating Expenses Selling, General, and Administrative Expense - Income before Income Taxes Income Tax Expense Net Income $ 1,170,000 822,200 347,800 23,400 x 0 x 11,000 $ 0 X CL