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28 Sep 2019
Multi-step Income Statement and Adjusting Entries
Oregon Distributors, whose accounting year ends on December 31, hadthe following normal balances in its ledger accounts at December31.
Cash $36,080 Accounts Receivable 101,200 Inventory 90,200 Prepaid Insurance 7,920 Office Supplies 5,280 Furniture & Fixtures 30,800 Accumulated Depreciation - Furn. & Fixtures 11,880 Delivery Equipment 77,000 Accumulated Depreciation - Delivery Equipment 26,840 Accounts Payable 76,340 Long-term Notes Payable 33,000 Common Stock 110,000 Retained Earnings 46,200 Sales Revenue 1,269,400 Cost of Goods Sold 903,320 Utilities Expense 9,460 Sales Salaries Expense 119,000 Delivery Expense 40,480 Advertising Expense 28,820 Rent Expense 33,000 Income Tax Expense 12,100 Office Salaries Expense 79,000
During the year, the accounting department prepared monthlystatements but no adjusting entries were made in the journals andledgers. Data for the year-end procedures are as follows:
Prepaid Insurance, December 31 $2,400 Depreciation Expense on furniture and fixures for year 2,100 Depreciation Expense on delivery equip. for the year 11,000 Salaries Payable, December 31 1,600 Office Supplies on hand, December 31 1,800
Required
a. Record the necessary adjusting entries at December 31.
b. Prepare a multi-step income statement for the year. Combine allthe operating expenses into one line on the income statement forselling, general and administrative expenses.
a.
GeneralJournal Date Description Ref. Debit Credit Dec. 31 AnswerAccounts PayableAccounts ReceivableAccumulatedDepreciation - Furn. & FixturesCashCommon StockCost of GoodsSoldAccumulated Depreciation - Delivery EquipmentDepreciationExpense - Delivery EquipmentDepreciation Expense - Furniture &FixturesFurniture & FixturesIncome Tax ExpenseInsuranceExpenseInventoryLong-Term Notes PayableOffice SuppliesOfficeSupplies ExpensePrepaid InsuranceRetained EarningsSales SalariesExpenseSalaries PayableSales RevenueSelling, General andAdministrative Expenses 1 Answer Answer AnswerAccounts PayableAccounts ReceivableAccumulatedDepreciation - Furniture & FixturesCashCommon StockCost ofGoods SoldAccumulated Depreciation - Delivery EquipmentDepreciationExpense - Delivery EquipmentDepreciation Expense - Furniture &FixturesFurniture & FixturesIncome Tax ExpenseInsuranceExpenseInventoryLong-Term Notes PayableOffice SuppliesOfficeSupplies ExpensePrepaid InsuranceRetained EarningsSales SalariesExpenseSalaries PayableSales RevenueSelling, General andAdministrative Expenses Answer Answer To record expired insurance.
31 AnswerAccounts PayableAccounts ReceivableAccumulatedDepreciation - Furn. & FixturesCashCommon StockCost of GoodsSoldAccumulated Depreciation - Delivery EquipmentDepreciationExpense - Delivery EquipmentDepreciation Expense - Furniture &FixturesFurniture & FixturesIncome Tax ExpenseInsuranceExpenseInventoryLong-Term Notes PayableOffice SuppliesOfficeSupplies ExpensePrepaid InsuranceRetained EarningsSales SalariesExpenseSalaries PayableSales RevenueSelling, General andAdministrative Expenses 2 Answer Answer AnswerAccounts PayableAccounts ReceivableAccumulatedDepreciation - Furn. & FixturesCashCommon StockCost of GoodsSoldAccumulated Depreciation - Delivery EquipmentDepreciationExpense - Delivery EquipmentDepreciation Expense - Furniture &FixturesFurniture & FixturesIncome Tax ExpenseInsuranceExpenseInventoryLong-Term Notes PayableOffice SuppliesOfficeSupplies ExpensePrepaid InsuranceRetained EarningsSales SalariesExpenseSalaries PayableSales RevenueSelling, General andAdministrative Expenses Answer Answer To record depreciation expense for furniture for theyear.
31 AnswerAccounts PayableAccounts ReceivableAccumulatedDepreciation - Furn. & FixturesCashCommon StockCost of GoodsSoldAccumulated Depreciation - Delivery EquipmentDepreciationExpense - Delivery EquipmentDepreciation Expense - Furniture &FixturesFurniture & FixturesIncome Tax ExpenseInsuranceExpenseInventoryLong-Term Notes PayableOffice SuppliesOfficeSupplies ExpensePrepaid InsuranceRetained EarningsSales SalariesExpenseSalaries PayableSales RevenueSelling, General andAdministrative Expenses 3 Answer Answer AnswerAccounts PayableAccounts ReceivableAccumulatedDepreciation - Furn. & FixturesCashCommon StockCost of GoodsSoldAccumulated Depreciation - Delivery EquipmentDepreciationExpense - Delivery EquipmentDepreciation Expense - Furniture &FixturesFurniture & FixturesIncome Tax ExpenseInsuranceExpenseInventoryLong-Term Notes PayableOffice SuppliesOfficeSupplies ExpensePrepaid InsuranceRetained EarningsSales SalariesExpenseSalaries PayableSales RevenueSelling, General andAdministrative Expenses Answer Answer To record depreciation expense for delivery equip. for theyear.
31 Sales Salaries Expense 4 Answer Answer AnswerAccounts PayableAccounts ReceivableAccumulatedDepreciation - Furn. & FixturesCashCommon StockCost of GoodsSoldAccumulated Depreciation - Delivery EquipmentDepreciationExpense - Delivery EquipmentDepreciation Expense - Furniture &FixturesFurniture & FixturesIncome Tax ExpenseInsuranceExpenseInventoryLong-Term Notes PayableOffice SuppliesOfficeSupplies ExpensePrepaid InsuranceRetained EarningsOffice SalariesExpenseSalaries PayableSales RevenueSelling, General andAdministrative Expenses Answer Answer AnswerAccounts PayableAccounts ReceivableAccumulatedDepreciation - Furn. & FixturesCashCommon StockCost of GoodsSoldAccumulated Depreciation - Delivery EquipmentDepreciationExpense - Delivery EquipmentDepreciation Expense - Furniture &FixturesFurniture & FixturesIncome Tax ExpenseInsuranceExpenseInventoryLong-Term Notes PayableOffice SuppliesOfficeSupplies ExpensePrepaid InsuranceRetained EarningsSales SalariesExpenseSalaries PayableSales RevenueSelling, General andAdministrative Expenses Answer Answer To record accrued salaries at December 31.
31 AnswerAccounts PayableAccounts ReceivableAccumulatedDepreciation - Furn. & FixturesCashCommon StockCost of GoodsSoldAccumulated Depreciation - Delivery EquipmentDepreciationExpense - Delivery EquipmentDepreciation Expense - Furniture &FixturesFurniture & FixturesIncome Tax ExpenseInsuranceExpenseInventoryLong-Term Notes PayableOffice SuppliesOfficeSupplies ExpensePrepaid InsuranceRetained EarningsSales SalariesExpenseSalaries PayableSales RevenueSelling, General andAdministrative Expenses 5 Answer Answer AnswerAccounts PayableAccounts ReceivableAccumulatedDepreciation - Furn. & FixturesCashCommon StockCost of GoodsSoldAccumulated Depreciation - Delivery EquipmentDepreciationExpense - Delivery EquipmentDepreciation Expense - Furniture &FixturesFurniture & FixturesIncome Tax ExpenseInsuranceExpenseInventoryLong-Term Notes PayableOffice SuppliesOfficeSupplies ExpensePrepaid InsuranceRetained EarningsSales SalariesExpenseSalaries PayableSales RevenueSelling, General andAdministrative Expenses Answer Answer To record office supplies used.
b. Do not use negative signs with your answers.
OREGONDISTRIBUTORS
Income Statement
For the Year Ended December 31 AnswerSales RevenueCost of Goods SoldSelling, General, andAdministrative ExpenseIncome Tax Expense $Answer AnswerSales RevenueCost of Goods SoldSelling, General, andAdministrative ExpenseIncome Tax Expense Answer Gross Profit on Sales Answer Operating Expenses AnswerSales RevenueCost of Goods SoldSelling, General, andAdministrative ExpenseIncome Tax Expense Answer Income before Income Taxes Answer AnswerSales RevenueCost of Goods SoldSelling, General, andAdministrative ExpenseIncome Tax Expense Answer Net Income $Answer
Multi-step Income Statement and Adjusting Entries
Oregon Distributors, whose accounting year ends on December 31, hadthe following normal balances in its ledger accounts at December31.
Cash | $36,080 |
Accounts Receivable | 101,200 |
Inventory | 90,200 |
Prepaid Insurance | 7,920 |
Office Supplies | 5,280 |
Furniture & Fixtures | 30,800 |
Accumulated Depreciation - Furn. & Fixtures | 11,880 |
Delivery Equipment | 77,000 |
Accumulated Depreciation - Delivery Equipment | 26,840 |
Accounts Payable | 76,340 |
Long-term Notes Payable | 33,000 |
Common Stock | 110,000 |
Retained Earnings | 46,200 |
Sales Revenue | 1,269,400 |
Cost of Goods Sold | 903,320 |
Utilities Expense | 9,460 |
Sales Salaries Expense | 119,000 |
Delivery Expense | 40,480 |
Advertising Expense | 28,820 |
Rent Expense | 33,000 |
Income Tax Expense | 12,100 |
Office Salaries Expense | 79,000 |
During the year, the accounting department prepared monthlystatements but no adjusting entries were made in the journals andledgers. Data for the year-end procedures are as follows:
Prepaid Insurance, December 31 | $2,400 |
Depreciation Expense on furniture and fixures for year | 2,100 |
Depreciation Expense on delivery equip. for the year | 11,000 |
Salaries Payable, December 31 | 1,600 |
Office Supplies on hand, December 31 | 1,800 |
Required
a. Record the necessary adjusting entries at December 31.
b. Prepare a multi-step income statement for the year. Combine allthe operating expenses into one line on the income statement forselling, general and administrative expenses.
a.
GeneralJournal | |||||
---|---|---|---|---|---|
Date | Description | Ref. | Debit | Credit | |
Dec. | 31 | AnswerAccounts PayableAccounts ReceivableAccumulatedDepreciation - Furn. & FixturesCashCommon StockCost of GoodsSoldAccumulated Depreciation - Delivery EquipmentDepreciationExpense - Delivery EquipmentDepreciation Expense - Furniture &FixturesFurniture & FixturesIncome Tax ExpenseInsuranceExpenseInventoryLong-Term Notes PayableOffice SuppliesOfficeSupplies ExpensePrepaid InsuranceRetained EarningsSales SalariesExpenseSalaries PayableSales RevenueSelling, General andAdministrative Expenses | 1 | Answer | Answer |
AnswerAccounts PayableAccounts ReceivableAccumulatedDepreciation - Furniture & FixturesCashCommon StockCost ofGoods SoldAccumulated Depreciation - Delivery EquipmentDepreciationExpense - Delivery EquipmentDepreciation Expense - Furniture &FixturesFurniture & FixturesIncome Tax ExpenseInsuranceExpenseInventoryLong-Term Notes PayableOffice SuppliesOfficeSupplies ExpensePrepaid InsuranceRetained EarningsSales SalariesExpenseSalaries PayableSales RevenueSelling, General andAdministrative Expenses | Answer | Answer | |||
To record expired insurance. | |||||
31 | AnswerAccounts PayableAccounts ReceivableAccumulatedDepreciation - Furn. & FixturesCashCommon StockCost of GoodsSoldAccumulated Depreciation - Delivery EquipmentDepreciationExpense - Delivery EquipmentDepreciation Expense - Furniture &FixturesFurniture & FixturesIncome Tax ExpenseInsuranceExpenseInventoryLong-Term Notes PayableOffice SuppliesOfficeSupplies ExpensePrepaid InsuranceRetained EarningsSales SalariesExpenseSalaries PayableSales RevenueSelling, General andAdministrative Expenses | 2 | Answer | Answer | |
AnswerAccounts PayableAccounts ReceivableAccumulatedDepreciation - Furn. & FixturesCashCommon StockCost of GoodsSoldAccumulated Depreciation - Delivery EquipmentDepreciationExpense - Delivery EquipmentDepreciation Expense - Furniture &FixturesFurniture & FixturesIncome Tax ExpenseInsuranceExpenseInventoryLong-Term Notes PayableOffice SuppliesOfficeSupplies ExpensePrepaid InsuranceRetained EarningsSales SalariesExpenseSalaries PayableSales RevenueSelling, General andAdministrative Expenses | Answer | Answer | |||
To record depreciation expense for furniture for theyear. | |||||
31 | AnswerAccounts PayableAccounts ReceivableAccumulatedDepreciation - Furn. & FixturesCashCommon StockCost of GoodsSoldAccumulated Depreciation - Delivery EquipmentDepreciationExpense - Delivery EquipmentDepreciation Expense - Furniture &FixturesFurniture & FixturesIncome Tax ExpenseInsuranceExpenseInventoryLong-Term Notes PayableOffice SuppliesOfficeSupplies ExpensePrepaid InsuranceRetained EarningsSales SalariesExpenseSalaries PayableSales RevenueSelling, General andAdministrative Expenses | 3 | Answer | Answer | |
AnswerAccounts PayableAccounts ReceivableAccumulatedDepreciation - Furn. & FixturesCashCommon StockCost of GoodsSoldAccumulated Depreciation - Delivery EquipmentDepreciationExpense - Delivery EquipmentDepreciation Expense - Furniture &FixturesFurniture & FixturesIncome Tax ExpenseInsuranceExpenseInventoryLong-Term Notes PayableOffice SuppliesOfficeSupplies ExpensePrepaid InsuranceRetained EarningsSales SalariesExpenseSalaries PayableSales RevenueSelling, General andAdministrative Expenses | Answer | Answer | |||
To record depreciation expense for delivery equip. for theyear. | |||||
31 | Sales Salaries Expense | 4 | Answer | Answer | |
AnswerAccounts PayableAccounts ReceivableAccumulatedDepreciation - Furn. & FixturesCashCommon StockCost of GoodsSoldAccumulated Depreciation - Delivery EquipmentDepreciationExpense - Delivery EquipmentDepreciation Expense - Furniture &FixturesFurniture & FixturesIncome Tax ExpenseInsuranceExpenseInventoryLong-Term Notes PayableOffice SuppliesOfficeSupplies ExpensePrepaid InsuranceRetained EarningsOffice SalariesExpenseSalaries PayableSales RevenueSelling, General andAdministrative Expenses | Answer | Answer | |||
AnswerAccounts PayableAccounts ReceivableAccumulatedDepreciation - Furn. & FixturesCashCommon StockCost of GoodsSoldAccumulated Depreciation - Delivery EquipmentDepreciationExpense - Delivery EquipmentDepreciation Expense - Furniture &FixturesFurniture & FixturesIncome Tax ExpenseInsuranceExpenseInventoryLong-Term Notes PayableOffice SuppliesOfficeSupplies ExpensePrepaid InsuranceRetained EarningsSales SalariesExpenseSalaries PayableSales RevenueSelling, General andAdministrative Expenses | Answer | Answer | |||
To record accrued salaries at December 31. | |||||
31 | AnswerAccounts PayableAccounts ReceivableAccumulatedDepreciation - Furn. & FixturesCashCommon StockCost of GoodsSoldAccumulated Depreciation - Delivery EquipmentDepreciationExpense - Delivery EquipmentDepreciation Expense - Furniture &FixturesFurniture & FixturesIncome Tax ExpenseInsuranceExpenseInventoryLong-Term Notes PayableOffice SuppliesOfficeSupplies ExpensePrepaid InsuranceRetained EarningsSales SalariesExpenseSalaries PayableSales RevenueSelling, General andAdministrative Expenses | 5 | Answer | Answer | |
AnswerAccounts PayableAccounts ReceivableAccumulatedDepreciation - Furn. & FixturesCashCommon StockCost of GoodsSoldAccumulated Depreciation - Delivery EquipmentDepreciationExpense - Delivery EquipmentDepreciation Expense - Furniture &FixturesFurniture & FixturesIncome Tax ExpenseInsuranceExpenseInventoryLong-Term Notes PayableOffice SuppliesOfficeSupplies ExpensePrepaid InsuranceRetained EarningsSales SalariesExpenseSalaries PayableSales RevenueSelling, General andAdministrative Expenses | Answer | Answer | |||
To record office supplies used. |
b. Do not use negative signs with your answers.
OREGONDISTRIBUTORS Income Statement For the Year Ended December 31 | |
---|---|
AnswerSales RevenueCost of Goods SoldSelling, General, andAdministrative ExpenseIncome Tax Expense | $Answer |
AnswerSales RevenueCost of Goods SoldSelling, General, andAdministrative ExpenseIncome Tax Expense | Answer |
Gross Profit on Sales | Answer |
Operating Expenses | |
AnswerSales RevenueCost of Goods SoldSelling, General, andAdministrative ExpenseIncome Tax Expense | Answer |
Income before Income Taxes | Answer |
AnswerSales RevenueCost of Goods SoldSelling, General, andAdministrative ExpenseIncome Tax Expense | Answer |
Net Income | $Answer |
Jarrod RobelLv2
28 Sep 2019