Reference no: EM13905332
The following unadjusted trial balance is prepared at fiscal year end for Nelson Company.
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Rent expense and salaries expense are equally divided between selling activities and the general and administrative activities. Nelson Company uses a perpetual inventory system.
Required:
1. Prepare adjusting journal entries to reflect each of the following:
a. Store supplies still available at fiscal year end amount to $ 1,750.
b. Expired insurance, an administrative expense, for the fiscal year is $ 1,400.
c. Depreciation expense on store equipment, a selling expense, is $ 1,525 for the fiscal year.
d. To estimate shrinkage, a physical count of ending merchandise inventory is taken. It shows $ 10,900 of inventory is still available at fiscal year end.
2. Prepare a multiple step income statement for fiscal year 2013.
3. Prepare a single step income statement for fiscal year 2013. 4. Compute the current ratio, acid test ratio, and gross margin ratio as of January 31, 2013. (Round ratios to twodecimals.)