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4. Compute the current ratio, acid-test ratio, and gross margin ratio as of January 31. (Round your answers to 2 decimal places.) Answer is complete but not entirely correct. 2.27 1.52 * :1 0.66 :1 Current ratio Acid-test ratio Gross margin ratio

4. Compute the current ratio, acid-test ratio, and gross margin ratio as of January 31. (Round your answers to 2 decimal places.) Answer is complete but not entirely correct. 2.27 1.52 * :1 0.66 :1 Current ratio Acid-test ratio Gross margin ratio

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Required information [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, and Advertising Expense. It categorizes the remaining expenses as general and administrative. Cash Merchandise inventory Store supplies Prepaid insurance Store equipment Accumulated depreciation-Store equipment Accounts payable Common stock Retained earnings. Dividends NELSON COMPANY Unadjusted Trial Balance January 31 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 Debit $ 18,550 14,500 5,900 2,700 43,000 Answer is complete but not entirely correct. 2.27 :1 1.52 X :1 0.66:1 Current ratio Acid-test ratio Gross margin ratio 2,150 2,100 2,100 38,000 0 13,600 13,600 0 7,500 7,500 0 9,400 $ 180,600 Credit $ 16,050 14,000 4,000 31,000 115,550 Additional Information: a. Store supplies still available at fiscal year-end amount to $1,950. b. Expired insurance, an administrative expense, is $1,600 for the fiscal year. 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 $10,200 of inventory is still available at fiscal year-end. $ 180,600 4. Compute the current ratio, acid-test ratio, and gross margin ratio as of January 31. (Round your answers to 2 decimal places.)
Transcribed Image Text:Required information [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, and Advertising Expense. It categorizes the remaining expenses as general and administrative. Cash Merchandise inventory Store supplies Prepaid insurance Store equipment Accumulated depreciation-Store equipment Accounts payable Common stock Retained earnings. Dividends NELSON COMPANY Unadjusted Trial Balance January 31 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 Debit $ 18,550 14,500 5,900 2,700 43,000 Answer is complete but not entirely correct. 2.27 :1 1.52 X :1 0.66:1 Current ratio Acid-test ratio Gross margin ratio 2,150 2,100 2,100 38,000 0 13,600 13,600 0 7,500 7,500 0 9,400 $ 180,600 Credit $ 16,050 14,000 4,000 31,000 115,550 Additional Information: a. Store supplies still available at fiscal year-end amount to $1,950. b. Expired insurance, an administrative expense, is $1,600 for the fiscal year. 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 $10,200 of inventory is still available at fiscal year-end. $ 180,600 4. Compute the current ratio, acid-test ratio, and gross margin ratio as of January 31. (Round your answers to 2 decimal places.)
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