Nelson company unadjusted trial balance debit credit

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Financial Accounting: The Impact on Decision Makers
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Chapter 11 / Exercise 1
Financial Accounting: The Impact on Decision Makers
Norton/Porter
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NELSON COMPANY Unadjusted Trial Balance January 31, 2017 Debit Credit Cash $ 1,000 Merchandise inventory 12,500 Store supplies 5,800 Prepaid insurance 2,400 Store equipment 42,900 Accumulated depreciation—Store equipment $ 15,250 Accounts payable 10,000 Common stock 5,000 Retained earnings 27,000 Dividends 2,200 Sales 111,950 Sales discounts 2,000 Sales returns and allowances 2,200 Cost of goods sold 38,400 Depreciation expense—Store equipment 0 Salaries expense 35,000 Insurance expense 0 Rent expense 15,000 Store supplies expense 0 Advertising expense 9,800 Totals $169,200 $169,200 Rent expense and salaries expense are equally divided between selling activities and general and administrative activities. Nelson Company uses a perpetual inventory system. Additional Information: 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. Required: 1. Using the above information prepare adjusting journal entries:
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Financial Accounting: The Impact on Decision Makers
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Chapter 11 / Exercise 1
Financial Accounting: The Impact on Decision Makers
Norton/Porter
Expert Verified
2. Prepare a multiple-step income statement for fiscal year 2017.
3. Prepare a single-step income statement for fiscal year 2017.
Required information [The following information applies to the questions displayed below.] The following unadjusted trial balance is prepared at fiscal year-end for Nelson Company. NELSON COMPANY Unadjusted Trial Balance January 31, 2017 Debit Credit Cash $ 1,000 Merchandise inventory 12,500 Store supplies 5,800 Prepaid insurance 2,400 Store equipment 42,900 Accumulated depreciation—Store equipment $ 15,250 Accounts payable 10,000 Common stock 5,000 Retained earnings 27,000 Dividends 2,200 Sales 111,950 Sales discounts 2,000 Sales returns and allowances 2,200 Cost of goods sold 38,400
Depreciation expense—Store equipment 0 Salaries expense 35,000 Insurance expense 0 Rent expense 15,000 Store supplies expense 0 Advertising expense 9,800 Totals $169,200 $169,200 Rent expense and salaries expense are equally divided between selling activities and general and administrative activities. Nelson Company uses a perpetual inventory system. Additional Information: 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. 4. Compute the current ratio, acid-test ratio, and gross margin ratio as of January 31, 2017. (Round your answers to 2 decimal places.) Nakashima Gallery had the following petty cash transactions in February of the current year. Feb. 2 Wrote a $400 check, cashed it, and gave the proceeds and the petty cashbox to Chloe Addison, the petty cashier. 5 Purchased bond paper for the copier for $14.15 that is immediately used.

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