4-5 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 | $ | 32,550 | |||
Merchandise inventory | 14,000 | ||||
Store supplies | 5,600 | ||||
Prepaid insurance | 2,300 | ||||
Store equipment | 42,900 | ||||
Accumulated depreciation—Store equipment | $ | 18,000 | |||
Accounts payable | 17,000 | ||||
Common stock | 3,200 | ||||
Retained earnings | 16,000 | ||||
Dividends | 2,050 | ||||
Sales | 141,750 | ||||
Sales discounts | 1,850 | ||||
Sales returns and allowances | 2,200 | ||||
Cost of goods sold | 38,000 | ||||
Depreciation expense—Store equipment | 0 | ||||
Salaries expense | 29,000 | ||||
Insurance expense | 0 | ||||
Rent expense | 16,000 | ||||
Store supplies expense | 0 | ||||
Advertising expense | 9,500 | ||||
Totals | $ | 195,950 | $ | 195,950 | |
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:
Additional Information:
4. Compute the current ratio, acid-test ratio,
and gross margin ratio as of January 31, 2017. (Round your
answers to 2 decimal places.)
Adjusting Journal entries for the year ended on January 31, 2017 | |||
Date | Account titles | Debit | Credit |
31-Jan | Store Supplies expense | $3,800 | |
Store Supplies | $3,800 | ||
(To record supplies expense for Jan) | |||
(5600-1800) | |||
31-Jan | Insurance Expense | $1,500 | |
Prepaid Insurance | $1,500 | ||
(To record insurance expense for the year) | |||
31-Jan | Depreciation expense-Store Equipment | $1,600 | |
Accumulated Depreciation-Store Equip. | $1,600 | ||
(To record depreciation for the year) | |||
31-Jan | Cost of goods sold | $3,200 | |
Inventory | $3,200 | ||
(To record loss of inventory due to shrinkage) | |||
Multi step Income statement | |||
Account Titles | Amount | ||
Sales | $141,750 | ||
Less: Sales returns and allowances | ($2,200) | ||
Sales discount | ($1,850) | ||
Net Sales | $137,700 | ||
Cost of goods sold | $41,200 | ||
Gross Profit | $96,500 | ||
Operating Expenses | |||
Selling expense: | |||
Depreciation expense-Store equipment | $1,600 | ||
Store supplies expense | $3,800 | ||
Salaries expense | $14,500 | ||
Rent expense | $8,000 | ||
Advertising expense | $9,500 | $37,400 | |
General and administrative expenses: | |||
Insurance expense | $1,500 | ||
Rent expense | $8,000 | ||
Salaries expense | $14,500 | $24,000 | |
Total Operating expenses | $61,400 | ||
Operating Profit | $35,100 | ||
Single step Income statement | |||
Account Titles | Amount | ||
Revenue | |||
Sales | $141,750 | ||
Less: Sales returns and allowances | ($2,200) | ||
Sales discount | ($1,850) | ||
Net Sales | $137,700 | ||
Expenses | |||
Cost of goods sold | $41,200 | ||
Depreciation expense-Store equipment | $1,600 | ||
Store supplies expense | $3,800 | ||
Salaries expense | $29,000 | ||
Rent expense | $16,000 | ||
Advertising expense | $9,500 | ||
Insurance expense | $1,500 | ||
Total Operating expenses | $102,600 | ||
Operating Profit | $35,100 | ||
1 | Current Ratio | ||
Current Ratio = Current Assets/Current Liabilities | |||
Cash | $32,550 | ||
Inventories | $10,800 | ||
Store Supplies | $1,800 | ||
Prepaid Insurance | $800 | ||
Total Current Assets | $45,950 | ||
Current liabilities (Accounts payable) | $17,000 | ||
Current Ratio (45950/17000) | 2.70 | ||
2 | The Acid test ratio | ||
Cash | $32,550 | ||
Store Supplies | $1,800 | ||
Prepaid Insurance | $800 | ||
Quick Assets | $35,150 | ||
Current liabilities (Accounts payable) | $17,000 | ||
Acid-test Ratio (35150/17000) | 2.07 | ||
3 | Gross Margin ratio | ||
Gross Margin ratio = Gross profit/Net sales) | |||
Gross Profit | $96,500 | ||
Net Sales | $137,700 | ||
Gross margin ratio | 70.08% |
4-5 The following unadjusted trial balance is prepared at fiscal year-end for Nelson Company. NELSON COMPANY...
4-5 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 $ 31,200 Merchandise inventory 14,500 Store supplies 5,200 Prepaid insurance 2,800 Store equipment 42,600 Accumulated depreciation—Store equipment $ 16,000 Accounts payable 13,000 Common stock 3,800 Retained earnings 19,000 Dividends 2,100 Sales 141,750 Sales discounts 1,900 Sales returns and allowances 2,050 Cost of goods sold 38,000 Depreciation expense—Store equipment 0 Salaries expense 27,800 Insurance expense 0...
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 $ 46,550 Merchandise inventory 13,000 Store supplies 5,500 Prepaid insurance 2,800 Store equipment 42,600 Accumulated depreciation—Store equipment $ 19,800 Accounts payable 16,000 J. Nelson, Capital 18,000 J. Nelson, Withdrawals 2,250 Sales 153,600 Sales discounts 2,000 Sales returns and allowances 2,200 Cost of goods sold 38,000 Depreciation expense—Store equipment 0 Salaries expense 27,100 Insurance expense 0 Rent...
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 $ 22,050 Merchandise inventory 15,000 Store supplies 5,300 Prepaid insurance 2,700 Store equipment 42,600 Accumulated depreciation—Store equipment $...
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 $ 27,900 Merchandise inventory 13,000 Store supplies 5,800 Prepaid insurance 2,700 Store equipment 42,700 Accumulated depreciation—Store equipment $...
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 Credit Debit $ 22,300 13,500 5,900 2,500 42,900 $ 16,100 17,000 4,000 28,000 2,050 115,900 Cash Merchandise inventory Store supplies Prepaid...
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 $ 20,650 Merchandise inventory 14,000 Store supplies 5,300 Prepaid insurance 2,500 Store equipment 42,900 Accumulated depreciation—Store equipment $...
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 Credit Debit $ 13,500 14,000 5,900 2,200 42,800 $ 17,000 13,000 3,000 31,000 2,000 115,850 Cash Merchandise inventory Store supplies Prepaid...
LIHry Tropri pium 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 Credit Debit $ 22,150 12,500 5,500 2,600 42,600 $ 17,050 14,000 5,000 34,000 2,150 116,600 Cash Merchandise inventory...
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 $ 22,150 Merchandise inventory 13,000 Store supplies 5,100 Prepaid insurance 2,800 Store equipment 42,800 Accumulated depreciation—Store equipment $...
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 $ 23,950 Merchandise inventory 12,500 Store supplies 5,500 Prepaid insurance 2,500 Store equipment 42,800 Accumulated depreciation—Store equipment $...