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Required information [The following information applies to the questions displayed below.) The following unadjusted trial balance is prepared at fiscal year-end for Nelson Company NELSON COMPANY Unadjusted Trial Balance January 31, 2017 Credit Debit $ 33,050 13,569 5,900 2,400 42,880 $ 19,250 15,000 3,480 17,000 2,250 137,800 Cash Merchandise inventory Store supplies Prepaid insurance Store equipment Accumulated depreciation-Store equipment Accounts payable Common stock Retained earnings Dividends Sales Sales discounts Sales returns and allowances Cost of goods sold Depreciation expense-Store equipment Salaries expense Insurance expense Rent expense Store supplies expense Advertising expense Totals 2,100 2,050 38,000 27,400 13,000 10,000 $ 192,450 $ 192,450 Rent expense and salaries expense are equally divided between selling activities and a activities, Nelson Company uses a perpetual inventory system. Additional Information: a. Store supplies still available at fiscal year-end amount to $2.050. b. Expired insurance, an administrative expense, for the fiscal year is $1.450. C. Depreciation expense on store equipment, a selling expense, is $1.700 for the fiscal d. To estimate shrinkage, a physical count of ending merchandise inventory is taken. Its available at fiscal year-end. Required 1 Required 2 Required 3 Prepare a multiple-step income statement for fiscal year 2017. $ 137,800 NELSON COMPANY Income Statement For Year Ended January 31, 2017 Sales Less: Sales discounts $ 2,100 Less: Sales returns and allowances T 2 ,050 Net sales Cost of goods sold Gross profit Expense Selling expenses Advertising expense $ 10,000 Depreciation expense-Store equipment Rent expense-Selling space Sales salaries expense Store supplies expense 4,150 133,650 38,000 95,650 10,000 Total selling expenses General and administrative expenses Insurance expense Office salaries expense Rent expense-Office space 10.000 Total general and administrative expenses Total expenses Net income NELSON COMPANY Unadjusted Trial Balance January 31, 2017 Credit Debit $ 33,050 13,500 5,900 2,400 42,800 $ 19.250 15,000 3,400 17.000 2,250 Cash Merchandise inventory Store Supplies Prepaid insurance Store equipment Accumulated depreciation-Store equipment Accounts payable Common stock Retained earnings Dividends Sales Sales discounts Sales returns and allowances Cost of goods sold Depreciation expense-Store equipment Salaries expense Insurance expense Rent expense Store supplies expense Advertising expense Totals 137.800 2.100 2,050 38,000 27,400 13,000 10,000 $192,450 $ 192,450 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: a. Store supplies still available at fiscal year-end amount to $2,050. b. Expired insurance, an administrative expense for the fiscal year is $1,450. c. Depreciation expense on store equipment, a selling expense, is $1,700 for the fiscal year. d. To estimate shrinkage, a physical count of ending merchandise inventory is taken. It shows $10,500 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, 2017 (Round your answers to 2 decimal places.) Current ratio Acid-test ratio Gross margin ratio
