4. Compute the current ratio, acid-test ratio, and gross margin ratio as of January 31, 2017. (Round your answers to 2 decimal places.) Current ratio :1 Acid-test ratio Gross margin ratio :1 :1
4. Compute the current ratio, acid-test ratio, and gross margin ratio as of January 31, 2017. (Round your answers to 2 decimal places.) Current ratio :1 Acid-test ratio Gross margin ratio :1 :1
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
![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
$ 28,400
Merchandise inventory
Store supplies
Prepaid insurance
Store equipment
Accumulated depreciation-Store equipment
Accounts payable
J. Nelson, Capital
J. Nelson, Withdrawals
Sales
15,000
5,900
2,300
42,900
$ 17,350
15,000
15,000
2,250
144,650
Sales discounts
2,050
Sales returns and allowances
Cost of goods sold
Depreciation expense-Store equipment
Salaries expense
Insurance expense
Rent expense
Store supplies expense
Advertising expense
2,200
38,000
27,800
16,000
9,200
Totals
$192,000
$192,000
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:
a. Store supplies still available at fiscal year-end amount to $2,000.
b. Expired insurance, an administrative expense, for the fiscal year is $1,650.
c. Depreciation expense on store equipment, a selling expense, is $1,575 for the fiscal year.
d. 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.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F64166d4c-e482-4f11-a4ed-1a99eef62872%2F0db5bf8c-ef15-4ecd-aa2b-66dbc75e2521%2F5ml5ey9_processed.jpeg&w=3840&q=75)
Transcribed Image Text: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
$ 28,400
Merchandise inventory
Store supplies
Prepaid insurance
Store equipment
Accumulated depreciation-Store equipment
Accounts payable
J. Nelson, Capital
J. Nelson, Withdrawals
Sales
15,000
5,900
2,300
42,900
$ 17,350
15,000
15,000
2,250
144,650
Sales discounts
2,050
Sales returns and allowances
Cost of goods sold
Depreciation expense-Store equipment
Salaries expense
Insurance expense
Rent expense
Store supplies expense
Advertising expense
2,200
38,000
27,800
16,000
9,200
Totals
$192,000
$192,000
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:
a. Store supplies still available at fiscal year-end amount to $2,000.
b. Expired insurance, an administrative expense, for the fiscal year is $1,650.
c. Depreciation expense on store equipment, a selling expense, is $1,575 for the fiscal year.
d. 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.
![2,200
38,000
Cost of goods sold
Depreciation expense-Store equipment
Salaries expense
27,800
Insurance expense
Rent expense
16,000
Store supplies expense
Advertising expense
9,200
Totals
$192,000
$192,000
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:
a. Store supplies still available at fiscal year-end amount to $2,000.
b. Expired insurance, an administrative expense, for the fiscal year is $1,650.
c. Depreciation expense on store equipment, a selling expense, is $1,575 for the fiscal year.
d. 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.
Problem 5-5A Part 4
4. Compute the current ratio, acid-test ratio, and gross margin ratio as of January 31, 2017. (Round your answers to 2 decimal places.)
Current ratio
:1
Acid-test ratio
:1
:1
Gross margin ratio](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F64166d4c-e482-4f11-a4ed-1a99eef62872%2F0db5bf8c-ef15-4ecd-aa2b-66dbc75e2521%2Fald9pm_processed.jpeg&w=3840&q=75)
Transcribed Image Text:2,200
38,000
Cost of goods sold
Depreciation expense-Store equipment
Salaries expense
27,800
Insurance expense
Rent expense
16,000
Store supplies expense
Advertising expense
9,200
Totals
$192,000
$192,000
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:
a. Store supplies still available at fiscal year-end amount to $2,000.
b. Expired insurance, an administrative expense, for the fiscal year is $1,650.
c. Depreciation expense on store equipment, a selling expense, is $1,575 for the fiscal year.
d. 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.
Problem 5-5A Part 4
4. Compute the current ratio, acid-test ratio, and gross margin ratio as of January 31, 2017. (Round your answers to 2 decimal places.)
Current ratio
:1
Acid-test ratio
:1
:1
Gross margin ratio
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