ACCT 2001 Chapter : Accounting Income Statement
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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 |
Presented here are the accounts of
Town and Country RealtyTown and Country Realty
for the year ended
DecemberDecember
Land | $10,000 | Owner contribution, 2018 | $36,000 | |
Notes Payable | 29,000 | Accounts Payable | 10,000 | |
Property Tax Expense | 2,400 | Accounts Receivable | 1,300 | |
Hicks, Withdrawals | 36,000 | Advertising Expense | 12,000 | |
Rent Expense | 8,000 | Building | 194,800 | |
Salaries Expense | 63,000 | Cash | 2,200 | |
Salaries Payable | 800 | Equipment | 13,000 | |
Service Revenue | 235,000 | Insurance Expense | 1,800 | |
Office Supplies | 9,000 | Interest Expense | 7,300 | |
Hicks, Capital, Dec. 31, 2017 | 50,000 |
PrintDone
3131â,
20182018.
LOADING...
â(Click the icon to view theâ accounts.)
Requirements
1. | Prepare Town and Country Realty'sTown and Country Realty's income statement. |
2. | Prepare the statement ofâ owner's equity. |
3. | Prepare the balance sheet. |
Requirement 1. Prepare
Town and Country Realty'sTown and Country Realty's
income statement.
Town and Country Realty | ||||
Income Statement | ||||
Year Ended December 31, 2018 | ||||
Revenues: | ||||
Service Revenue | ||||
Expenses: | ||||
Salaries Expense | ||||
Insurance Expense | ||||
Advertising Expense | ||||
Rent Expense | ||||
Interest Expense | ||||
Property Tax Expense | ||||
Total Expenses | ||||
Net Income |