Problem 5-5A (Algo) Preparing adjusting entries and income statements; computing gross margin, acid- test, and current ratios LO A1, 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 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 Unadj Tria: Balance January 31 Credit Debit $ 19, 350 14,500 5,000 2,100 42,900 $ 16, 100 18,000 31,000 2,150 114,650 Cash Merchandise inventory Store supplies Prepaid insurance Store equipment Accumulated depreciation-Store equipment Accounts payable J. Nelson, Capital J. Nelson, Withdrawals Sales Sales discounts Sales returns and allowances Cost of goods sold Depreciation expense-Store equipment Sales salaries expense Office salaries expense Insurance expense Rent expense-Selling space Rent expense-Office space Store supplies expense Advertising expense Totals 2,050 2,000 38,000 0 14,250 14,250 0 7,000 7,000 0 9, 200 $ 179, 750 $ 179,750 Additional Information: a. Store supplies still available at fiscal year-end amount to $1,800. b. Expired insurance, an administrative expense, is $1,800 for the fiscal year. c. Depreciation expense on store equipment, a selling expense, is $1,550 for the fiscal year. d. To estimate shrinkage, a physical count of ending merchandise inventory is taken. It shows $10,200 of inventory is still available at fiscal year-end