The following unadjusted trial balance is prepared at fiscalyear-end for Nelson Company. NELSON COMPANYUnadjusted Trial BalanceJanuary 31, 2013 Debit Credit Cash $ 1,000 Merchandiseinventory...

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

NELSON COMPANY Unadjusted Trial Balance January 31, 2013
Debit	Credit
Cash	$	1,000
Merchandise inventory	12,500
Store supplies	5,800
Prepaid insurance	2,400
Store equipment	42,900
Accumulated depreciationA????1Store equipment	$	15,250
Accounts payable	10,000
J. Nelson, Capital	32,000
J. Nelson, Withdrawals	2,200
Sales	111,950
Sales discounts	2,000
Sales returns and allowances	2,200
Cost of goods sold	38,400
Depreciation expenseA????1Store equipment	0
Salaries expense	35,000
Insurance expense	0
Rent expense	15,000
Store supplies expense	0
Advertising expense	9,800
Totals	$	169,200	$	169,200

Rent expense and salaries expense are equally divided between selling activities and the general and administrative activities. Nelson Company uses a perpetual inventory system.

Store supplies still available at fiscal year-end amount to $1,750.

Expired insurance, an administrative expense, for the fiscal year is $1,400.

Depreciation expense on store equipment, a selling expense, is $1,525 for the fiscal year.

To estimate shrinkage, a physical count of ending merchandise inventory is taken. It shows $10,900 of inventory is still available at fiscal year-end.

NEEDED:

1) Prepare a multiple-step income statement for fiscal year 2013.

2)Prepare a single-step income statement for fiscal year 2013.

3)Compute the current ratio, acid-test ratio, and gross margin ratio as of January 31, 2013.
(Round your answers to 2 decimal places.)

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July	1	Purchased merchandise from Boden Company for $6,000 under credit terms of 1/15, n/30, FOB shipping point, invoice dated July 1.
2	Sold merchandise to Creek Co. for $900 under credit terms of 2/10, n/60, FOB shipping point, invoice dated July 2. The merchandise had cost $500.
3	Paid $125 cash for freight charges on the purchase of July 1.
8	Sold merchandise that had cost $1,300 for $1,700 cash.
9	Purchased merchandise from Leight Co. for $2,200 under credit terms of 2/15, n/60, FOB destination, invoice dated July 9.
11	Received a $200 credit memorandum from Leight Co. for the return of part of the merchandise purchased on July 9.
12	Received the balance due from Creek Co. for the invoice dated July 2, net of the discount.
16	Paid the balance due to Boden Company within the discount period.
19	Sold merchandise that cost $800 to Art Co. for $1,200 under credit terms of 2/15, n/60, FOB shipping point, invoice dated July 19.
21	Issued a $200 credit memorandum to Art Co. for an allowance on goods sold on July 19.
24	Paid Leight Co. the balance due after deducting the discount.
30	Received the balance due from Art Co. for the invoice dated July 19, net of discount.
31	Sold merchandise that cost $4,800 to Creek Co. for $7,000 under credit terms of 2/10, n/60, FOB shipping point, invoice dated July 31.

Prepare journal entries to record the above merchandising transactions of Blink Company, which applies the perpetual inventory system.

Nov 11, 2021

SOLUTION.PDF

The following unadjusted trial balance is prepared at fiscalyear-end for Nelson Company. NELSON COMPANYUnadjusted Trial BalanceJanuary 31, 2013 Debit Credit Cash $ 1,000 Merchandiseinventory...

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