P5-3B - Preparing adjusting entries and income statements, and computing gross margin, acid-test, and current ratios The following unadjusted trial balance is prepared at financial year-end for FAB Products Company. .@)X BIU$ %, A % - 20 Credit Ble Edt View Insert Format Toots Data accounting Window web ID 280 . .le@ 21 110 P3100% Arial FAB PRODUCTS COMPANY Unadjusted Trial Balance October 31, 2015 Debit 2 Cash $ 4,400 3 Merchandise inventory 23,000 4 Store supplies 9,600 Prepaid insurance 4,600 6 Store equipment 83,800 7. Accumulated depreciation-Store equipment Accounts payable 9 A. Fab, Capital 10 A. Fab, Withdrawals 2,000 11 Sales 12 Sales discounts 2,000 13 Sales returns and allowances 4,000 14 Cost of goods sold 74,800 15 Depreciation expense-Store equipment 16 Salaries expense 62,000 17 Insurance expense 18 Rent expense 28,000 19 Store supplies expense 20 Advertising expense 19,800 21 Totals $318,000 22 $ 30,000 16,000 64,000 208,000 $ 318,000 Required 1. Prepare adjusting journal entries to reflect each of the following. a. Store supplies still available at financial year-end amount to $3,300. b. Expired insurance, an administrative expense, for the financial year is $3,000. c. Depreciation expense on store equipment, a selling expense, is $2,800 for the financial year. d. To estimate shrinkage, a physical count of ending merchandise inventory is taken. It shows $22,200 of inventory is still available at financial year-end. 2. Prepare an income statement for financial year 2015. 3. Compute the current ratio, acid-test ratio, and gross margin ratio as at October 31, 2015