Multi step income statement and adjusting entries 2023 Business Finance

2023 Multi step income statement and adjusting entries the Boston trading company whose accounting year ends on December 31 had

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                                                            $6000

office supplies                                                                   $4200

furniture and fixtures                                                     $21,000

accumulated depreciation –

                furniture and fixtures                                     $5000

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                                                               $4800

sales salaries expense                                                    $82,000

delivery expense                                                              $10,800

advertising expense                                                       $5500

rent expense                                                                     $14,400

office salaries expense                                                  $56,000

income tax expense                                                       $9000

 

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.

 

 

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