Problem 5-3A Preparing adjusting entries and income statements; and computing gross margin, acid-test, and current ratios The following unadjusted trial balance is prepared at fiscal year-end for rex Company. Rent expense and salaries expense are equally divided between selling activities and the general and administrative activities. Helix Company uses a perpetual inventory system. Required 1. Prepare adjusting journal entries to reflect each of the following: a. Store supplies still available at fiscal year-end amount to $1,650. b. Expired insurance, an administrative expense, for the fiscal year is $1,500. c. Depreciation expense on store equipment, a selling expense, is $1,400 for the fiscal year. d. To estimate shrinkage, a physical count of ending merchandise inventory is taken. It shows $11,100 of inventory is still available at fiscal year-end. 2. Prepare a multiple-step income statement for fiscal year 2011. 3. Prepare a single-step income statement for fiscal year 2011. 4. Compute the current ratio, acid-test ratio, and gross margin ratio as of January 31, 2011.

BUSI1002R_Introduction to Accounting_Ch.5_Questions P.1 BUSI1002R_Introduction to Accounting_Ch.5_Questions P.2 Problem 5-3A Preparing adjusting entries and income statements; and computing gross margin, acid-test, and current ratios The following unadjusted trial balance is prepared at fiscal year-end for Helix Company. Rent expense and salaries expense are equally divided between selling activities and the general and administrative activities. Helix Company uses a perpetual inventory system. Required 1. Prepare adjusting journal entries to reflect each of the following: a. Store supplies still available at fiscal year-end amount to $2,550. b. Expired insurance, an administrative expense, for the fiscal year is $1,450. c. Depreciation expense on store equipment, a selling expense, is $1,975 for the fiscal year. d. To estimate shrinkage, a physical count of ending merchandise inventory is taken. It shows $10,300 of inventory is still available at fiscal year-end. 2. Prepare a multiple-step income statement for fiscal year 2009. 3. Prepare a single-step income statement for fiscal year 2009. 4. Compute the current ratio, acid-test ratio, and gross margin ratio as of January 31, 2009