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  3. the following unadjusted trial balance is prepared at fiscal yearend...

Question: the following unadjusted trial balance is prepared at fiscal yearend...

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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 $ 32,550
Merchandise inventory 14,000
Store supplies 5,600
Prepaid insurance 2,300
Store equipment 42,900
Accumulated depreciation—Store equipment $ 18,000
Accounts payable 17,000
Common stock 3,200
Retained earnings 16,000
Dividends 2,050
Sales 141,750
Sales discounts 1,850
Sales returns and allowances 2,200
Cost of goods sold 38,000
Depreciation expense—Store equipment 0
Salaries expense 29,000
Insurance expense 0
Rent expense 16,000
Store supplies expense 0
Advertising expense 9,500
Totals $ 195,950 $ 195,950

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 $1,800.
  2. Expired insurance, an administrative expense, for the fiscal year is $1,500.
  3. Depreciation expense on store equipment, a selling expense, is $1,600 for the fiscal year.
  4. To estimate shrinkage, a physical count of ending merchandise inventory is taken. It shows $10,800 of inventory is still available at fiscal year-end.

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.

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