Skip to main content

Chapter 5 End of Chapter Problems

Answer Saved

Help opens in a new window Save & ExitSubmit

Item 7

4.32 points

Item Skipped

eBook

Print

References

Check my work Check My Work button is now enabled2

Item 7

Item 7 4.32 points Item Skipped

The following unadjusted trial balance is prepared at fiscal year-end for Nelson Company.

NELSON COMPANY Unadjusted Trial Balance January 31, 2017
	Debit			Credit
Cash	$	17,350
Merchandise inventory		14,000
Store supplies		5,400
Prepaid insurance		2,500
Store equipment		42,700
Accumulated depreciationStore equipment				$	17,000
Accounts payable					13,000
J. Nelson, Capital					16,000
J. Nelson, Withdrawals		2,150
Sales					130,950
Sales discounts		2,000
Sales returns and allowances		2,050
Cost of goods sold		38,000
Depreciation expenseStore equipment		0
Salaries expense		29,300
Insurance expense		0
Rent expense		12,000
Store supplies expense		0
Advertising expense		9,500
Totals	$	176,950		$	176,950

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:

1. Store supplies still available at fiscal year-end amount to $1,950.
2. Expired insurance, an administrative expense, for the fiscal year is $1,700.
3. Depreciation expense on store equipment, a selling expense, is $1,700 for the fiscal year.
4. To estimate shrinkage, a physical count of ending merchandise inventory is taken. It shows $10,400 of inventory is still available at fiscal year-end.

Required:

Prepare and complete the entire 10-column work sheet for Nelson Company.