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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. Cash NELSON COMPANY Unadjusted Trial Balance January 31 Debit Credit $ 22,400 13,500 Merchandise inventory Store supplies 6,000 Prepaid insurance Store equipment 2,400 42,800 Accumulated depreciation-Store equipment $ 16,750 Accounts payable 14,000 Common stock 5,000 Retained earnings 29,000 Dividends 2,200 Sales 115,450 Sales discounts 1,950 Sales returns and allowances 2,150 Cost of goods sold 38,000 Depreciation expense-Store equipment 0 Sales salaries expense 12,900 Office salaries expense 12,900 Insurance expense 0 Rent expense-Selling space 6,500 Rent expense-Office space 6,500 Store supplies expense Advertising expense Totals Additional Information: 0 10,000 $ 180,200 $ 180,200 a. Store supplies still available at fiscal year-end amount to $2,950. b. Expired insurance, an administrative expense, is $1,800 for the fiscal year. c. Depreciation expense on store equipment, a selling expense, is $1,625 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. 4. Compute the current ratio, acid-test ratio, and gross margin ratio as of January 31. Note: Round your answers to 2 decimal places. Current ratio :1 Acid-test ratio :1 Gross margin ratio :1

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. Cash NELSON COMPANY Unadjusted Trial Balance January 31 Debit Credit $ 22,400 13,500 Merchandise inventory Store supplies 6,000 Prepaid insurance Store equipment 2,400 42,800 Accumulated depreciation-Store equipment $ 16,750 Accounts payable 14,000 Common stock 5,000 Retained earnings 29,000 Dividends 2,200 Sales 115,450 Sales discounts 1,950 Sales returns and allowances 2,150 Cost of goods sold 38,000 Depreciation expense-Store equipment 0 Sales salaries expense 12,900 Office salaries expense 12,900 Insurance expense 0 Rent expense-Selling space 6,500 Rent expense-Office space 6,500 Store supplies expense Advertising expense Totals Additional Information: 0 10,000 $ 180,200 $ 180,200 a. Store supplies still available at fiscal year-end amount to $2,950. b. Expired insurance, an administrative expense, is $1,800 for the fiscal year. c. Depreciation expense on store equipment, a selling expense, is $1,625 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. 4. Compute the current ratio, acid-test ratio, and gross margin ratio as of January 31. Note: Round your answers to 2 decimal places. Current ratio :1 Acid-test ratio :1 Gross margin ratio :1

Century 21 Accounting General Journal
Century 21 Accounting General Journal
11th Edition
ISBN:9781337680059
Author:Gilbertson
Publisher:Gilbertson
Chapter16: Financial Statements And Closing Entries For A Corporation
Section: Chapter Questions
Problem 1CP
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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. Cash NELSON COMPANY Unadjusted Trial Balance January 31 Debit Credit $ 22,400 13,500 Merchandise inventory Store supplies 6,000 Prepaid insurance Store equipment 2,400 42,800 Accumulated depreciation-Store equipment $ 16,750 Accounts payable 14,000 Common stock 5,000 Retained earnings 29,000 Dividends 2,200 Sales 115,450 Sales discounts 1,950 Sales returns and allowances 2,150 Cost of goods sold 38,000 Depreciation expense-Store equipment 0 Sales salaries expense 12,900 Office salaries expense 12,900 Insurance expense 0 Rent expense-Selling space 6,500 Rent expense-Office space 6,500 Store supplies expense Advertising expense Totals Additional Information: 0 10,000 $ 180,200 $ 180,200 a. Store supplies still available at fiscal year-end amount to $2,950. b. Expired insurance, an administrative expense, is $1,800 for the fiscal year. c. Depreciation expense on store equipment, a selling expense, is $1,625 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. 4. Compute the current ratio, acid-test ratio, and gross margin ratio as of January 31. Note: Round your answers to 2 decimal places. Current ratio :1 Acid-test ratio :1 Gross margin ratio :1
Transcribed Image Text: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. Cash NELSON COMPANY Unadjusted Trial Balance January 31 Debit Credit $ 22,400 13,500 Merchandise inventory Store supplies 6,000 Prepaid insurance Store equipment 2,400 42,800 Accumulated depreciation-Store equipment $ 16,750 Accounts payable 14,000 Common stock 5,000 Retained earnings 29,000 Dividends 2,200 Sales 115,450 Sales discounts 1,950 Sales returns and allowances 2,150 Cost of goods sold 38,000 Depreciation expense-Store equipment 0 Sales salaries expense 12,900 Office salaries expense 12,900 Insurance expense 0 Rent expense-Selling space 6,500 Rent expense-Office space 6,500 Store supplies expense Advertising expense Totals Additional Information: 0 10,000 $ 180,200 $ 180,200 a. Store supplies still available at fiscal year-end amount to $2,950. b. Expired insurance, an administrative expense, is $1,800 for the fiscal year. c. Depreciation expense on store equipment, a selling expense, is $1,625 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. 4. Compute the current ratio, acid-test ratio, and gross margin ratio as of January 31. Note: Round your answers to 2 decimal places. Current ratio :1 Acid-test ratio :1 Gross margin ratio :1
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