Required information Problem 5-5A 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 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, advertising expense. It categorizes the remaining expenses as general and administrative. NELSON COMPANY Unadjusted Trial Balance January 31 Credit Debit $1,000 12,500 5,800 2,400 42,900 $ 15,250 10,000 32,000 2,200 111,950 Cash Merchandise inventory Store supplies Prepaid insurance Store equipment Accumulated depreciation-Store equipment Accounts payable J. Nelson, Capital J. Nelson, Withdrawals 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 2,000 2,200 38,400 17,500 17,500 0 7,500 7,500 0 9,800 $169,200 $169,200 Additional Information: a. 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. Problem 5-5A Part 4 4. Compute the current ratio, acid-test ratio, and gross margin ratio as of January 31. (Round your answers to 2 decimal places.) :1 Current ratio Acid-test ratio Gross margin ratio :1 :1