Student Name:
Class:
Trans.
Date Account Titles no. Debit Credit
Jan. 31 4,050
4,050 «- Correct!
31 1,400
31 1,525
1,525 «- Correct!
31 1,600
1,600 «- Correct!
Prepaid Insurance
111,950$
2,000$
2,200 4,200
107,750
40,000
67,750
Depreciation expense – Store equipment
17,500
7,500
4,050
9,800
40,375
Insurance expense
Office salaries expense
7,500
26,400
66,775
975$
Instructor
To adjust inventory for shrinkage.
To record depreciation expense.
To record expired insurance.
To record store supplies expense.
NELSON COMPANY
Problem 05-03A
McGraw-Hill/Irwin
General Journal
For Year Ended January 31, 2013
Income Statement
NELSON COMPANY
Adjusting Entries:
Store Supplies Expense
Store Supplies
Sales returns and allowances
Insurance Expense
Depreciation Expense – Store Equipment
Accumulated Depreciation – Store Equipment
Cost of Goods Sold
Merchandise Inventory
Sales
Less: Sales discounts
Total selling expenses
Net sales
Cost of goods sold
Gross profit
Expenses
Selling expenses
Sales salaries expense
Rent expense – Selling space
Store supplies expense
Advertising expense
General and administrative expenses
Rent expense – Office space
Total general and administrative expenses
Total expenses
Net income
Student Name:
Class:
Instructor
Problem 05-03A
McGraw-Hill/Irwin
Correct!
Student Name:
Class:
Instructor
Problem 05-03A
McGraw-Hill/Irwin
107,750$
40,000
40,375
26,400
106,775
975$
Correct!
$1,000
10,900
1,750
1,000
$14,650
$10,000
1.47 «- Correct!
$1,000
$10,000
0.10 «- Correct!
107,750$
40,000
67,750$
0.63 «- Correct!
Ratios
NELSON COMPANY
For Year Ended January 31, 2013
Income Statement
NELSON COMPANY
Selling expenses
Net sales
Expenses
Cost of goods sold
Quick assets: Cash
General and administrative expense
Total expenses
Net income
Current ratio:
Acid-test ratio:
Current assets:
Cash
Merchandise inventory
Store supplies
Prepaid insurance
Total current assets
Current liabilities
Current ratio
Gross margin ratio
Current liabilities
Acid-test ratio
Net sales
Cost of goods sold
Gross margin
Gross margin ratio:
1,000$
12,500
5,800
2,400
42,900
15,250$
10,000
32,000
2,200
111,950
2,000
2,200
38,400
–
35,000
–
15,000
–
9,800
169,200$ 169,200$
1,750$
1,400$
106,775$
975$
Depreciation expense for year
Ending inventory
Check figures:
(2) Gross profit
J. Nelson, Capital
January 31, 2013
Unadjusted Trial Balance
NELSON COMPANY
Given Data P05-03A:
Cash
Merchandise inventory
Store supplies
Prepaid insurance
Store equipment
Accumulated depreciation – Store equipment
Accounts payable
Totals
J. Nelson, Withdrawals
Sales
Sales discounts
Sales returns and allowances
Cost of goods sold
Depreciation expense – Store equipment
Salaries expense
Insurance expense
Rent expense
Store supplies expense
Advertising expense
Net income
Additional information:
Store supplies on hand at year-end
Expired insurance for year
(3) Total expenses