The following unadjusted trial balance is prepared at fiscal year-end for Nelson Company.

NELSON COMPANY Unadjusted Trial Balance January 31, 2016
	Debit			Credit
Cash	$	24,250
Merchandise inventory		13,000
Store supplies		5,200
Prepaid insurance		2,400
Store equipment		42,600
Accumulated depreciationStore equipment				$	19,650
Accounts payable					12,000
Common stock					18,000
Retained earnings					20,000
Dividends		2,200
Sales					115,600
Sales discounts		1,800
Sales returns and allowances		2,100
Cost of goods sold		38,000
Depreciation expenseStore equipment		0
Salaries expense		28,500
Insurance expense		0
Rent expense		16,000
Store supplies expense		0
Advertising expense		9,200
Totals	$	185,250		$	185,250

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:

Store supplies still available at fiscal year-end amount to $1,950.

Expired insurance, an administrative expense, for the fiscal year is $1,700.

Depreciation expense on store equipment, a selling expense, is $1,625 for the fiscal year.

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.

1. Using the above information prepare adjusting journal entries:

2. Prepare a multiple-step income statement for fiscal year 2016.The following unadjusted trial balance is prepared at fiscal year-end for Nelson Company.

3. Prepare a single-step income statement for fiscal year 2016.

4. Compute the current ratio, acid-test ratio, and gross margin ratio as of January 31, 2016. (Round your answers to 2 decimal places.)