Question

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The following unadjusted trial balance is prepared at fiscal year-end for Nelson Company. Nelson company uses a perpetual inventory system. It categorizes the following accounts as selling expenses: Depreciation Expense—Store Equipment, Sales Salaries Expense, Rent Expense—Selling Space, Store Supplies Expense, and Advertising Expense. It categorizes the remaining expenses as general and administrative.

NELSON COMPANY Unadjusted Trial Balance January 31
	Debit			Credit
Cash	$	19,950
Merchandise inventory		14,500
Store supplies		5,800
Prepaid insurance		2,300
Store equipment		42,800
Accumulated depreciation—Store equipment				$	16,100
Accounts payable					15,000
Common stock					4,000
Retained earnings					33,000
Dividends		2,050
Sales					115,500
Sales discounts		1,900
Sales returns and allowances		2,200
Cost of goods sold		38,000
Depreciation expense—Store equipment		0
Sales salaries expense		14,700
Office salaries expense		14,700
Insurance expense		0
Rent expense—Selling space		7,500
Rent expense—Office space		7,500
Store supplies expense		0
Advertising expense		9,700
Totals	$	183,600		$	183,600

Additional Information:

1. Store supplies still available at fiscal year-end amount to $1,750.
2. Expired insurance, an administrative expense, is $1,700 for the fiscal year.
3. Depreciation expense on store equipment, a selling expense, is $1,650 for the fiscal year.
4. To estimate shrinkage, a physical count of ending merchandise inventory is taken. It shows $10,500 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. (Round your answers to 2 decimal places.)

Answer 1