The following unadjusted trial balance is prepared at fiscal year-end for Nelson Company. Nelson company uses…
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Question “The following unadjusted trial balance is prepared at fiscal year-end for Nelson Company. Nelson company uses…”
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 Unadjusted Trial Balance January 31 Credit Debit $ 13,500 14,000 5,900 2,200 42,800 $ 17,000 13,000 3,000 31,000 2,000 115,850 Cash Merchandise inventory Store supplies Prepaid insurance Store equipment Accumulated depreciation–Store equipment Accounts payable Common stock Retained earnings Dividends 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 1,850 2,200 38,000 0 15,800 15,800 0 8,000 8,000 0 9,800 $ 179,850 $179,850
Additional Information: a. Store supplies still available at fiscal year-end amount to $2,650. b. Expired insurance, an administrative expense, is $1,500 for the fiscal year. c. Depreciation expense on store equipment, a selling expense, is $1,650 for the fiscal year. d. To estimate shrinkage, a physical count of ending merchandise inventory is taken. It shows $10,700 of inventory is still available at fiscal year-end.
Required: 1. Using the above information, prepare adjusting journal entries. 2. Prepare a multiple-step income statement for the year ended January 31. 3. Prepare a single-step income statement for the year ended January 31.
Answer
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1 SI. Credit Date Jan 31. Debit $ 3,250 an. Credit Date Jan 31 Debit $ 3,250 a.
$ $$ $ Account Titles Cash Merchandise Inventory Store supplies Prepaid Insurance Store Equipment Accumulated depreciation Accounts Payable Common stock Dividends Sales Returns and allowances Price of goods sold Depreciation Rent Expense Space Rent Expense -Office Space Store Supplies Expense Advertising Totals SMART TOUCH LEARNING Worksheet December 31, 2016, Adjustments
NELSON COMPANY Income Report for the Year Ended on March 31. Cost of goods $41,300 Selling expenses $38,500 General & Administrative Expenses $25,300 NELSON COMPANY income Statement for the Year Ended on March 31, 2011. Sales $ 115.850. Sales Discounts $ 1,850. Rent Expense -Selling Space $ 8,800. Advertising Expense $ 9,800. Total Expenses net Income $105,100. $ 6,700. $ 38,500. Total General and administrative Expenses.
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