Required information 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 Debit Credit 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 $ 4,500 15,000 5,200 2,700 42,700 $ 19,650 13,000 3,200 16,000 2,100 116,450 2,300 38,000 31,000 13,000 9,700 $168,300 $168,300 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 $2,500. b. Expired insurance, an administrative expense, for the fiscal year is $1,500. c. Depreciation expense on store equipment, a selling expense, is $1,575 for the fiscal year. d. To estimate shrinkage, a physical count of ending merchandise inventory is taken. It shows $10,700 of inventory is still available at fiscal year-end. Prepare a single-step income statement for fiscal year 2017 NELSON COMPANY Income Statement For Year Ended January 31, 2017 Net sales $112,050 Expenses Cost of goods sold Selling expenses General and administrative expenses Total expenses et income