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The following unadjusted trial balance is prepared at fiscal year-end for Nelson Company. Nelson Company uses a perpetual inventory system. It categorizes the following
The following unadjusted trial balance is prepared at fiscal year-end for Nelson Company. Nelson Company uses a perpetual inventory system. It categorizes the following accounts as selling expenses: Depreciation Expense-Store Equipment, Sales Salaries Expense, Rent Expense-Selling Space, Store Supplies Expense, and Advertising Expense. It categorizes the remaining expenses as general and administrative. NELSON COMPANY Unadjusted Trial Balance January 31 Cash Merchandise inventory Debit $ 22,900 14,000 Credit Store supplies 5,500 Prepaid insurance Store equipment 2,800 42,900 Accounts payable Accumulated depreciation-Store equipment Common stock $ 16,450 17,000 5,000 Retained earnings 30,000 Dividends 2,050 Sales 116,300 Sales discounts 2,050 Sales returns and allowances 2,150 Cost of goods sold 38,000 Depreciation expense-Store equipment 0 Sales salaries expense 13,900 Office salaries expense 13,900 Insurance expense 0 Rent expense-Selling space 7,500 Rent expense-Office space Store supplies expense Advertising expense Totals 7,500 0 9,600 $ 184,750 $ 184,750 Additional Information: a. Store supplies still available at fiscal year-end amount to $1,900. b. Expired insurance, an administrative expense, is $1,400 for the fiscal year. c. Depreciation expense on store equipment, a selling expense, is $1,600 for the fiscal year. d. To estimate shrinkage, a physical count of ending merchandise inventory is taken. It shows $10,300 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. (Round your answers to 2 decimal places.) Current ratio :1 :1 Acid-test ratio Gross margin ratio :1
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