Question

Need help with where I went wrong on required 2 and help with 3

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:

1. Store supplies still available at fiscal year-end amount to $2,400.
2. Expired insurance, an administrative expense, for the fiscal year is $1,550.
3. Depreciation expense on store equipment, a selling expense, is $1,550 for the fiscal year.
4. To estimate shrinkage, a physical count of ending merchandise inventory is taken. It shows $10,100 of inventory is still available at fiscal year-end.

Required:
1. Using the above information prepare adjusting journal entries:
2. Prepare a multiple-step income statement for fiscal year 2018.
3. Prepare a single-step income statement for fiscal year 2018.
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, 2018 Credit Debit $ 7,880 14, see 5,790 2,300 43, $ 17,700 17, eee 3.289 16,000 2,100 116,200 Merchandise inventory Store supplies Prepaid insurance Store equipment Accumulated depreciation-store equipment Accounts payable Common stock Retained earnings Dividends Sales Sales discounts Sales returns and allowances Cost of goods sold Depreciation expense-Store equipment Salaries expense Insurance expense Rent expense Store supplies expense Advertising expense Totals 1.999 2.300 38,000 27,600 15,80 9.990 $170, 100 $17e, les 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 $2.400. red insurance, an administrative expense, for the fiscal year is $1.550. c. Depreciation expense on store equipment, a selling expense, is $1,550 for the fiscal year. d. To estimate shrinkage, a physical count of ending merchandise inventory is taken. It shows $10,100 of inventory is still available at fiscal year-end. Required: 1. Using the above information prepare adjusting journal entries: 2. Prepare a multiple-step income statement for fiscal year 2018. 3. Prepare a single-step income statement for fiscal year 2018.

Answer 1

را credit Date General Journal [Jan. 31 store supplies Expense. store supplies (To record store supplies) Debit $ 2,400 $2,400 Jan 31 $1,550 Insurance expense Prepaid Insurance (To record insurance expenses هيدرا + Jan. 31 Depreciation expense - estore equipment $1,550 Accumulated depreciatien-Stoll equipment (To second depreciation expense) $1,550 $4,400 Jan. 31 Cost of goods sold | Merchandise Inventory (To record merchandise inventory) $ 4,400 Calculation: Jan 31: Cost of goods sold & Beginning merchandise inventory - Ending merchandise inventory = $14,500 - $10,100 a $ 4400

ره $ 116, 200 $ 1,900 NELSON COMPANY Income statement for Year Ended January 31, 2018 Sales les: sales discounts less: sales returns and allowances $ 2,300 Met sales les: Cost of goods sold Gros Profit Expense Selling expenses - Advertising expense $ 9,900 Depreciation expense - store equipment & 1,550 Rent expense - selling space $ 7,500 sales salaries expense $ 13,800 stose suppries expense $3,300 $ 4,200 $112,000 $ 42, 4oo $ 69,600 Total selling expenses $ 36,050 General and administrative expenses Insurance expense. $ 1, SSO Office salaries expense $13,800 Rent expense - Office Space $ 7,500 Total general and administrative expenses $ 22,850 Total expenses Net Income $ 58, goo 1$ 10700

Calculation: Cost of goods sold journal entries) = $38,000 + $4,400 (from = $42,400 Rent expense and salaries expense are equally divided between selling activities and general and admin expense Rent expense- selling space = $15,000 X 14 =$7,500 Reat expense - office space = $15,000 x 1 $7,520 Sales salaries expense = $27,600 x 1 2 $13,800 store supplies expense (Beginning store supplies - Ending ettore deepplies) = $5,700 - $2,400 = $3,300

$ 112,000 NELSON COMPANY Income Statement for Year Ended January 31, 2018 Met Sales Expen B4 General and administrative expenses $ 22,850 velling expenses $36,050 Cost of goods sold $ 42,400 less: Net Total expenses Income $ 101,300 $ 10,700 Calculation: Net sales= sales - sales discounts - sales return and allowances = $116,000-$1,900 - $2,300 = $ 112,000 administrative expenses, selling expenses and goods sold are calculated above in part (2). General and cost of