Problem 4-5A Preparing adjusting entries and income statements; computing gross margin, acid-test, and current ratios LO A1, A2, P3, P4 [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 $ 1,000 12,500 5,800 2,400 42,900 $ 15,250 10,000 5,000 27. 2,200 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 111,950 2,000 2,200 38, 400 0 35,000 0 15,000 9,800 $169,200 $169,200 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 $1,750. b. Expired insurance, an administrative expense, for the fiscal year is $1,400. c. Depreciation expense on store equipment, a selling expense, is $1,525 for the fiscal year. d. To estimate shrinkage, a physical count of ending merchandise inventory is taken. It shows $10,900 of inventory is still available at fiscal vear-end Required information art 1 of 2 Required 1 Required 2 Required 3 Prepare a multiple-step income statement for fiscal year 2017. 5 pints NELSON COMPANY Income Statement For Year Ended January 31, 2017 Sales 111,950 $ 2,000 2,200 Less: Sales discounts Less: Sales returns and allowances Net sales Cost of goods sold Gross profit Expense Selling expenses Rent expense-Selling space Sales salaries expense 4,200 107,750 40,000 67,750 0 Store supplies expense Depreciation expense-Store equipment Advertising expense 4,050 1,525 9,800 0 15,375 Total selling expenses General and administrative expenses ic aw Il Answer is not complete. of 2 Complete this questions by entering your answers in the below tabs. Required 1 Required 2 Required 3 Prepare a single-step income statement for fiscal year 2017. NELSON COMPANY Income Statement For Year Ended January 31, 2017 Net sales Expenses General and administrative expenses Selling expenses $ 107,750 Total expenses 0