Student Name:
Class:
Trans.
Date Account Titles no. Debit Credit
Jan. 31 4,050
4,050 «- Correct!
31 1,400
1,400 «- Correct!
31 1,525
To adjust inventory for shrinkage.
To record depreciation expense.
Accumulated Depreciation – Store Equipment
Cost of Goods Sold
Merchandise Inventory
111,950$
2,000$
2,200 4,200
107,750
40,000
67,750
1,525
17,500
7,500
4,050
9,800
Total selling expenses
General and administrative expenses
Insurance expense
Office salaries expense
Rent expense – Office space
Total general and administrative expenses
Total expenses
NELSON COMPANY
Problem 04-03A
McGraw-Hill/Irwin
Instructor
To record expired insurance.
To record store supplies expense.
General Journal
For Year Ended January 31, 2013
Income Statement
Adjusting Entries:
Store Supplies Expense
Store Supplies
Insurance Expense
Prepaid Insurance
Depreciation Expense – Store Equipment
Sales
Less: Sales discounts
Sales returns and allowances
Net sales
Cost of goods sold
Gross profit
Expenses
Selling expenses
Depreciation expense – Store equipment
Sales salaries expense
Rent expense – Selling space
Store supplies expense
Advertising expense
Student Name:
Class:
Problem 04-03A
McGraw-Hill/Irwin
Instructor
Student Name:
Class:
Problem 04-03A
McGraw-Hill/Irwin
Instructor
107,750$
40,000
40,375
26,400
106,775
975$
Correct!
$1,000
10,900
1,750
1,000
Acid-test ratio:
Total current assets
Current liabilities
$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
Net sales
Expenses
Cost of goods sold
Selling expenses
General and administrative expense
Total expenses
Net income
Current ratio:
Gross margin ratio:
Current assets:
Cash
Merchandise inventory
Store supplies
Prepaid insurance
Quick assets: Cash
Gross margin ratio
Current liabilities
Acid-test ratio
Net sales
Cost of goods sold
Gross margin
1,000$
12,500
5,800
2,400
42,900
15,250$
10,000
5,000
27,000
2,200
111,950
2,000
2,200
38,400
–
35,000
–
15,000
–
9,800
169,200$ 169,200$
1,750$
Net income
Expired insurance for year
Depreciation expense for year
Ending inventory
Check figures:
(2) Gross profit
(3) Total expenses
January 31, 2013
Unadjusted Trial Balance
NELSON COMPANY
Cash
Merchandise inventory
Store supplies
Prepaid insurance
Store equipment
Accumulated depreciation – Store equipment
Accounts payable
Common stock
Advertising expense
Retained earnings
Totals
Dividends
Sales
Sales discounts
Sales returns and allowances
Cost of goods sold
Depreciation expense – Store equipment
Additional information:
Store supplies on hand at year-end
Given Data P04-03A:
Salaries expense
Insurance expense
Rent expense
Store supplies expense