Question

The fiscal year-end unadjusted trial balance for Nelson Company is found on the trial balance tab....

The fiscal year-end unadjusted trial balance for Nelson Company is found on the trial balance tab. Rent expense and salaries expense are equally divided between selling activities and the general and administrative activities. Nelson Company uses a perpetual inventory system. Descriptions of items that require adjusting entries on January 31, 2016, follow.

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.

Q1. For transactions 1-4 prepare the required adjusting journal entries. For transactions 5-8, prepare the required closing entries. This is the complete question. For 4 enteries above, they are asking to make 4 Adjusting and 4 Closing Enteries.

Q2,Multiple Step IS- Begin by selecting "Adjusted" from the drop-down below. Then, use the adjusted trial balance to prepare a multiple-step income statement. Rent expense and salaries expense are equally divided between selling activities and the general and administrative activities. For operating expenses, you must enter both the account title and the dollar amount.

Q3, Single Step IS : A single-step income statement yields the same net income, but does not show the same level of detail/subtotals as the multiple-step income statement. Use the information from the multiple-step income statement to complete the single-step income statement below.

Q4. Prepare a classified balance sheet as of January 31, 2015.

Q5. Compute the following ratios as of January 31, 2016. Round each ratio to 2 decimal places: Current Ratio, Acid-test ratio, Gross Margin Ratio.

Nelson Company
Trial Balance
January 31, 2016
Account Title Debit Credit
Cash 1,000
Merchandise inventory 12,500
Store supplies 5,800
Prepaid insurance 2,400
Store equipment 42,900
Accumulated depreciation - Store equip. 15,250
Accounts payable 10,000
Common stock 5,000
Dividends 2,200
Retained earnings 27,000
Sales 111,950
Sales discounts 2,000
Sales returns and allowances 2,200
Cost of goods sold 38,400
Salaries expense 35,000
Rent expense 15,000
Advertising expense 9,800
Total 169,200

169,200
Business   Accounting   
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Homework Answers

Answer #1

1. Adjusting Entries and Closing Entries are as follows:

2. Multiple Step Income statement is as follows:

3. Single Step Income Statement is as follows:

4. Classified Balance Sheet is as follows:

5. Ratios:

Current Ratio = Current Assets Current Liabilities

= $14,650 $10,000

= 1.465

= 1.46

Acid-Test Ratio = Liquid Assets(Cash or Accounts Receivable or Short Term Investments) Current Liabilities

= $1,000 $10,000

= 0.1

Gross Margin Ratio = Gross Profit Net Sales

= $69,350 $107,750

= 64.36%

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