Question
The Boston Trading Company, whose accounting year ends on December 31, had the following normal balances in its general ledger at December 31. Cash $19,500
The Boston Trading Company, whose accounting year ends on December 31, had the following normal balances in its general ledger at December 31.
Cash | $19,500 |
Accounts Receivable | 84,900 |
Inventory | 109,500 |
Prepaid Insurance | 9,000 |
Office Supplies | 6,300 |
Furniture & Fixtures | 31,500 |
Accumulated Depreciation - Furn. & Fixtures | 7,500 |
Delivery Equipment | 126,000 |
Accumulated Depreciation - Delivery Equipment | 18,000 |
Accounts Payable | 61,500 |
Long-term Notes Payable | 45,000 |
Common Stock | 112,500 |
Retained Earnings | 77,100 |
Sales Revenue | 945,000 |
Cost of Goods Sold | 606,000 |
Utilities Expense | 7,200 |
Sales Salaries Expense | 120,000 |
Delivery Expense | 16,200 |
Advertising Expense | 8,400 |
Rent Expense | 21,600 |
Office Salaries Expense | 87,000 |
Income Tax Expense | 13,500 |
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 | 14,000 |
Salaries Payable, December 31 ($1,800 Sales and $1,200 Office) | 3,000 |
Unused office supplies on December 31 | 1,000 |
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 Description Date DEC 31 Ref Credit To recand cxpired insurance to record depr. expenses for Furniture ho could depr. passe for dann dup to record accured salaries at decat! Income statement Gross profit on sales Operating expenses Income befart income taxes Iver incomeStep by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started