Reference no: EM131208907

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	$13,000
Accounts Receivable	$56,600
Inventory	$73,000
prepaid insurance	$6,000
office supplies	$4,200
furniture and fixtures	$21,000
accumulated depreciation -
furniture and fixtures	$5,000
delivery equipment	$84,000
accumulated depreciation -
delivery equipment	$12,000
Accounts Payable	$41,000
long-term notes payable	$30,000
common stock	$75,000
retained earnings	$51,400
sales revenue	$630,000
cost of goods sold	$404,000
utilities expense	$4,800
sales salaries expense	$82,000
delivery expense	$10,800
advertising expense	$5,500
rent expense	$14,400
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 and procedures are as follows:

1. prepaid insurance, December 31, was $1200
2. depreciation expense on furniture and fixtures for the year was $1800
3. depreciation expense on delivery equipment for the year was $13,000
4. salaries payable, December 31 ($1800 sales and $1200 office) was $3000
5. unused office supplies on December 31 were $1000

Required

a. record the necessary adjusting entries at December 31

b. prepare a multi step income statement for the year. Combine all operating expenses into one line on the income statement for selling, general and administrative expenses.