The following unadjusted trial balance is prepared at fiscal year-end for Nelson Company.
NELSON COMPANY
Unadjusted Trial Balance
January 31, 2013
Debit Credit
Cash $ 26,150
Merchandise inventory 14,500
Store supplies 5,000
Prepaid insurance 2,100
Store equipment 42,800
Accumulated depreciation-Store equipment $ 19,850
Accounts payable 12,000
J. Nelson, Capital
40,000
J. Nelson, Withdrawals 2,150
Sales
116,200
Sales discounts 2,000
Sales returns and allowances 2,250
Cost of goods sold 38,000
Depreciation expense-Store equipment 0
Salaries expense 30,700
Insurance expense 0
Rent expense 13,000
Store supplies expense 0
Advertising expense 9,400
Totals $ 188,050 $ 188,050
Rent expense and salaries expense are equally divided between selling activities and the general and administrative activities. Nelson Company uses a perpetual inventory system.
a. Store supplies still available at fiscal year-end amount to $1,700.
b. Expired insurance, an administrative expense, for the fiscal year is $1,750.
c. Depreciation expense on store equipment, a selling expense, is $1,600 for the fiscal year.
d.
To estimate shrinkage, a physical count of ending merchandise inventory is taken. It shows $10,300 of inventory is still available at fiscal year-end.