Question

(i need it typed please)

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	$45,920
Accounts Receivable	128,800
Inventory	114,800
Prepaid Insurance	10,080
Office Supplies	6,720
Furniture & Fixtures	39,200
Accumulated Depreciation - Furn. & Fixtures	15,120
Delivery Equipment	98,000
Accumulated Depreciation - Delivery Equipment	34,160
Accounts Payable	97,160
Long-term Notes Payable	42,000
Common Stock	140,000
Retained Earnings	58,800
Sales Revenue	1,615,600
Cost of Goods Sold	1,149,680
Utilities Expense	12,040
Sales Salaries Expense	151,000
Delivery Expense	51,520
Advertising Expense	36,680
Rent Expense	42,000
Income Tax Expense	15,400
Office Salaries Expense	101,000

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:

Prepaid Insurance, December 31	$2,400
Depreciation Expense on furniture and fixures for year	2,000
Depreciation Expense on delivery equip. for the year	14,000
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 all the operating expenses into one line on the income statement for selling, general and administrative expenses.

a.

Description	Debit	Credit
To record expired insurance.
To record depreciation expense for furniture for the year.
To record depreciation expense for delivery equip. for the year.
Sales Salaries Expense
To record accrued salaries at December 31.

____

To record office supplies used.

b. Do not use negative signs with your answers.

OREGON DISTRIBUTORS Income Statement For the Year Ended December 31
____ Gross Profit on Sales Operating Expenses Income before Income Taxes Net Income

Answer 1

answer a
		Description	Debit	Credit	Working
	1	Insurance expenses	7680		=10080-2400
		Prepaid insurance		7680
		To record expired insurance.
	2	Depreciation - Furn. & Fixtures	2000
		Accumulated Depreciation - Furn. & Fixtures		2000
		To record depreciation expense for furniture for the year.
	3	Depreciation - equipment	14000
		Depreciation Expense on delivery equip. for the year		14000
		To record depreciation expense for delivery equip. for the year.
	4	Salary expenses	1600
		Salary payable		1600
		Sales Salaries Expense
	5	office supplies expenses	4920		=6720-1800
		office supplies		4920
		To record accrued salaries at December 31.
Answer b
		Operating expenses		Adjustment	adjusted balance
		Utilities Expense	12,040		12,040
		Sales Salaries Expense	151,000		151,000
		Delivery Expense	51,520		51,520
		Advertising Expense	36,680		36,680
		Rent Expense	42,000		42,000
		Office Salaries Expense	101,000	1600	102,600
		Depreciation - Furn. & Fixtures		14000	14,000
		Depreciation - equipment		14000	14,000
		Insurance expenses		7680	7,680
		office supplies		4920	4,920
					436,440
		Sales Revenue	1,615,600
	Less	Cost of Goods Sold	1,149,680
		Gross profit on sales	465,920
	Less	operating expenses	436,440
		Income before taxes	29,480
	Less	Taxes	15400
		Net income	14,080