Read the attached file for Nelson Company, Inc.

a. Use the adjustment data to prepare formal journal entries for any needed adjustments. You may want to use T accounts as illustrated in your text, however, they will not be graded. Only the journal entries and the ending financial statements (part b below) will be graded.

b. Prepare a balance sheet and an income statement for the period after considering your adjustments.

2. Torres, Inc. uses an aged account receivable schedule to estimate its bad debt expenses. They had the following balances for their accounts receivable before any year-end adjustments: (again, my powerpoints and the text problems at the end of the chapter will be helpful)

Accounts Receivable Balances								Estimated
								Uncollectible
Current						$312,000		1%
30 to 60 days overdue				$22,000				5%
61 to 90 days overdue				$5,000				25%
over 90 days overdue					$2,000			70%

The balance in the Allowance for Doubtful Accounts before adjustments was $3,500.

a. Prepare the journal entry to record bad debt expense for the period.

b. At the beginning of the next accounting period, the company discovered that one customer had declared bankruptcy and therefore would not pay his account. His balance was $500. Prepare the journal entry to record the write-off.

3. Jarosek, Inc. was a road construction firm that recently received a contract to construct a bridge in Uvalde, Texas for a total contract price of $2,000,000. The bridge took three years to complete. Project costs and receipts for each of the years were as follows:

Year Payments Received Costs Incurred

1 $800,000 $1,000,000

2 $400,000 $200,000

3 $800,000 $300,000

Using the percentage of completion method of accounting for long-term contracts, determine the amount of revenue, expenses and income that the company would recognize in each of the three years?

4. I have posted the financial statements for both Amazon and Walmart. Although the annual reports include a variety of information and promotional materials prepared by the company, find and review the audited financial statements, not management highlights and/or summaries. Using these statements, for both companies, prepare an analysis of their monetary assets by calculating the current ratio, acid-test ratio, days cash ratio, and the days receivables ratio as outlined in your text.

NELSON COMPANY INC.....

Nelson Company
Trial Balance
YE 12 31 XX
		Debit Balances				Credit Balances
Cash and Equivalents		$ 119,115.00		Accumulated Depreciation
Accounts Receivable		$ 162,500.00		on Store Equipment		$ 37,300.00
Merchandise Inventory		$ 700,680.00		Accounts Payable		$ 118,180.00
Store Equipment		$ 215,000.00		Notes Payable		$ 143,000.00
Supplies Inventory		$ 15,475.00		Common Stock		$ 300,000.00
Prepaid Insurance		$ 38,250.00		Retained Earnings		$ 122,375.00
Selling Expense		$ 24,900.00		Sales Revenues		$ 716,935.00
Sales Salaries		$ 105,750.00
Miscellaneous General Expenses		$ 31,000.00
Sales Discounts		$ 6,220.00
Interest Expense		$ 9,300.00
Social Security Tax Expense		$ 9,600.00
Total:		$ 1,437,790.00				$ 1,437,790.00
The data for the adjustments are:
1. Cost of merchandise sold, $302,990.
2. Depreciation on store equipment, $12,750.
3. Supplies inventory, Jan. 31, $5,210. (Purchases of supplies during the year were debited to the Supplies Inventory account.)
4. Expired Insurance, $4,660.
5. Interest accrued on notes payable, $3,730.
6. Sales salaries earned but not paid to employees, $3,575.
7. Interest earned on savings accounts, but not recorded,$390.
Required:
a. Set up T accounts with the balances given above.			OPTIONAL
b. Journalize your adjusting entries (required) and post them, adding other T accounts as necessary (optional)
c. Prepare an income statement for the fiscal year and a fiscal year-end balance sheet.