Rent Expense and Salaries Expense are equally divided between selling activities and the general and administrative activities. Rex Company uses a perpetual inventory system.

1. Prepare adjusting journal entries to reflect each of the following:
a. Store Supplies still available at fiscal year-end amount to $1,650.
b. Expired Insurance, an administrative expense, for the fiscal year is $1,500.
c. Depreciation Expense on store equipment, a selling expense, is 1,400 for the fiscal year.
d. To Estimate shrinkage, a physical count of ending merchandise inventory is taken. It shows $11,100 of inventory is still available at fiscal year-end.
2. Prepare a multiple-step income statement for fiscal year 2011.
3. Prepare a single-step income statement for fiscal year 2011.
4. Compute the current ratio, acid-test ratio, and gross margin ratio as of January 31,2011.

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REX COMPANY Unadjusted Trial Balance 31-Jan-11 Debit S2.200 11,500 4.800 2,300 41,900 Credit Cash Merchandise Inventory Store Supplies Prepaid Insurance Store Equpment Accumulated Depreciation-Store Equip Accounts Payable Common Stock Retained Earnings Dividend:s Sales Sales Discounts Sales Returns and Allowances Cost of goods sold Depreciation Expense-Store Equip Salaries Expense Insurance Expense Rent Expense Store Supplies Expense Advertising Expense Totals 15.000 9,000 5,000 27,000 2,000 04.000 1,000 2.000 37,400 31.000 14,000 9.900 160.000 S160.000