4-5 The following unadjusted trial balance is prepared at fiscalyear-end for Nelson Company. NELSON COMPANY Unadjusted TrialBalance January 31, 2017 Debit Credit Cash $ 31,200 Merchandiseinventory 14,500 Store supplies 5,200 Prepaid insurance 2,800 Storeequipment 42,600 Accumulated depreciation—Store equipment $ 16,000Accounts payable 13,000 Common stock 3,800 Retained earnings 19,000Dividends 2,100 Sales 141,750 Sales discounts 1,900 Sales returnsand allowances 2,050 Cost of goods sold 38,000 Depreciationexpense—Store equipment 0 Salaries expense 27,800 Insurance expense0 Rent expense 16,000 Store supplies expense 0 Advertising expense9,400 Totals $ 193,550 $ 193,550 Rent expense and salaries expenseare equally divided between selling activities and general andadministrative activities. Nelson Company uses a perpetualinventory system. Additional Information: Store supplies stillavailable at fiscal year-end amount to $2,700. Expired insurance,an administrative expense, for the fiscal year is $1,500.Depreciation expense on store equipment, a selling expense, is$1,600 for the fiscal year. To estimate shrinkage, a physical countof ending merchandise inventory is taken. It shows $10,900 ofinventory is still available at fiscal year-end. rev:10_24_2018_QC_CS-145044 Required: 1. Using the above informationprepare adjusting journal entries: 2. Prepare a multiple-stepincome statement for fiscal year 2017. 3. Prepare a single-stepincome statement for fiscal year 2017.
1
Store supplies still available at fiscal year-end amount to$2,700.
2
Expired insurance, an administrative expense, for the fiscalyear is $1,500.
3
Depreciation expense on store equipment, a selling expense, is$1,600 for the fiscal year.
4
To estimate shrinkage, a physical count of ending merchandiseinventory is taken. It shows $10,900 of inventory is stillavailable at fiscal year-end.
Prepare a multiple-step income statement for fiscal year2017.
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| | NELSON COMPANY | | Income Statement | | For Year Ended January 31, 2017 | | | | | | | | | | | | | | | | | | | | Expense | | | | Selling expenses | | | | | | | | | | | | | | | | | | | | | | | | | Total selling expenses | | | | General and administrativeexpenses | | | | | | | | | | | | | | | | Total general and administrativeexpenses | | | | Total expenses | | | | |
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Prepare a single-step income statement for fiscal year 2017.
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| | NELSON COMPANY | | Income Statement | | For Year Ended January 31, 2017 | | | | | Expenses | | | | | | | | | | | | | | | | | | | Total expenses | | | | | |
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