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

Rent expense and salaries expense are equally divided between selling activities and the general and administrative activities. Giaccio Products 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 $1,300.
c. Depreciation expense on store equipment, a selling expense, is $1,990 for the fiscal year.
d. To estimate shrinkage, a physical count of ending merchandise inventory is taken. It shows $11,600 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 October 31, 2009.

GIACCIO PRODUCTS COMPANY Unadjusted Trial Balance October 31, 2009 Debit 30,150 13,000 5,300 2,700 42,900 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 expense Insurance expense Rent expense Store supplies expense Advertising expense Totals $ 19,900 15,000 18,000 20,000 2,050 116,250 1,950 2,300 39,000 0 26,000 14,000 9,800 $189,150 $189,150