Nelson Company
Adjusted Trial Balance
31-Dec-18
	Debit	Credit
Cash	$3,000
Merchandise Inventory	2,500
Store Supplies	5,000
Prepaid Insurance	2,000
Store Equipment	42,900
Accumulated Depreciation		$15,250
Accounts Payable		6,991
Common Stock		5,000
Retained Earnings		27,000
Dividends	2,200
Sales		101,284
Sales Discounts	2,600
Sales Returns and Allowances	1,200
Cost of Goods Sold	36,400
Depreciation Expense – Store Equipment	1,525
Salaries Expense	32,000
Insurance Expense	1,200
Rent Expense	13,000
Store Supplies Expense	1,000
Advertising Expense	9000
Totals	155,525	155,525
Nelson Company
Unadjusted Trial Balance
31-Dec-19
	Debit	Credit
Cash	$1,000
Merchandise Inventory	12,500
Store Supplies	5,800
Prepaid Insurance	2,400
Store Equipment	42,900
Accumulated Depreciation		$15,250
Accounts Payable		10,000
Common Stock		5,000
Retained Earnings		27,000
Dividends	2,200
Sales		111,950
Sales Discounts	2,000
Sales Returns and Allowances	2,200
Cost of Goods Sold	38,400
Depreciation Expense – Store Equipment	0
Salaries Expense	35,000
Insurance Expense	0
Rent Expense	15,000
Store Supplies Expense	0
Advertising Expense	9,800
Totals	169,200	169,200

1. Rent expense and salaries expense are equally divided between selling activities and the general and administrative activities. Nelson Company uses a perpetual inventory system.
2. Prepare adjusting journal entries and an adjusted entries worksheet to reflect each of the following:
   1. Store supplies still available at fiscal year-end amount to $1,750.
   2. Expired insurance, an administrative expense, for the fiscal year is $1,400.
   3. Depreciation expense on store equipment, a selling expense, is $1,525 for the fiscal year.
   4. To estimate shrinkage, a physical count of ending merchandise inventory is taken. It shows $10,900 of inventory is still available at fiscal year-end.
3. Prepare a multiple-step income statement for fiscal years 2019 (vertical analysis) and a statement of retained earnings at December 31, 2019. .
4. Prepare a classified balance sheet at December 31, 2019. Use horizontal Analysis in creation of this statement.