Required information Problem 4-5A Preparing adjusting entries and income statements; computing gross margin, acid-test, and current ratios LO A1, A2, P3, P4 The following information applies to the questions displayed below] The following unadjusted trial balance is prepared at fiscal yearend for Nelson Company. NELSON COMPANY Unadjusted Trial Balance January 31, 2017 Debit Credit 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 Salaries expen e Insurance expense Rent expense Store aupplies expense Advertiaing expense Totale 1, 12, 500 5, 800 2,400 42,900 s 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 Rent expense and salaries expense are equally divided between selling activities and general and administrative activities. Nelson Company uses a perpetual inventory system Additional Information o. Store supplies still available at fiscal year-end amount to $1,750 b. Expired insurance, an administrative expense, for the fiscal year is $1,400 c. Depreciation expense on store equipment, a selling expense, is $1,525 for the fiscal year d. To estimate shrinkage, a physical count of ending merchandise inventory is taken. It shows $10,900 of inventory is still available at fiscal year-end Required 1 Required 2 Required 3 Prepare a multiple-step income statement for fiscal year 2017. NELSON COMPANY Income Statement For Year Ended January 31, 2017 Sales S 111,950 Less: Sales discounts 2,000 Less: Sales returns and allowances2200 Cost of goods sold 4,200 107,750 Gross proft Expense 107,750 Selling expenses Rent expense-Selling space Sales salaries expense Depreciation expense-Store equipment e Advertising expense S 15,000 35000 15.250 9,800 0 Total selling expenses 43.550 General and administrative expenses Rent expense-Office space Office salaries expense Insurance expense Store supplies expense 1400 5,800 Total general and administrative expenses 7.200 Total expenses 50,750 Net income Problem 4-5A Part 1, 2 and 3 Required: 1. Using the above information prepare adjusting journal entries: 2. Prepare a multiple-step income statement for fiscal year 2017. 3. Prepare a single-step income statement for fiscal year 2017 &Answer is not complete. Complete this questions by entering your answers in the below tabs. Required 1 Required 2 Required 3 Prepare a single-step income statement for fiscal year 2017. NELSON COMPANY Income Statement For Year Ended January 31, 2017 Retained earnings Expenses Total expenses Required 2 Problem 4-5A Part 4 4. Compute the current ratio, acid-test ratio, and gross margin ratio as of January 31, 2017. Current ratio Acid-test ratio Gross margin ratio