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Multi-step Income Statement and Adjusting Entries
Oregon 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 |
12,000 |
| Common Stock |
$125,000 |
| Retained Earnings |
42,000 |
| Sales Revenue |
1,165,000 |
| Cost of Goods Sold |
822,200 |
| Utilities Expense |
5,600 |
| Sales Salaries Expense |
108,000 |
| Delivery Expense |
36,800 |
| 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 |
$2,600 |
| 2. Depreciation Expense on furniture and fixtures for year |
3,000 |
| 3. Depreciation Expense on delivery equip. for the year |
10,000 |
| 4. Salaries Payable, December 31 ($2,000 Sales and $800 Office) |
2,800 |
5. Office Supplies on hand, December 31
|
1,800 |