Prepare a multiple-step income statement for fiscal year 2017. Complete this que
ID: 2543291 • Letter: P
Question
Prepare a multiple-step income statement for fiscal year 2017.
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Prepare a single-step income statement for fiscal year 2017.
NELSON COMPANY Unadjusted Trial Balance January 31, 2017 Debit 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 $ 1,000 12,500 5,800 2,400 42,900 $ 15,250 10,000 5,000 27,000 2,200 111,950 2,000 2,200 38,400 35,000 15,000 9,800 $169,200 $169,200 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 $1,750 b. Expired insurance, an administrative expense, for the fiscal year is $1,400 c. Depreciation expense on store equipment, a selling expense, is $1,525 for the fiscal year d. To estimate shrinkage, a physical count of ending merchandise inventory is taken. It shows $10,900 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 2017Explanation / Answer
Journal Entry Date Account Title Debit Credit 31/01/2017 Store Supplies Expense $4,050 To Store Supplies $4,050 To record Store Supplies Expense 31/01/2017 Insurance Expense $1,400 Prepaid Insurance $1,400 To Record Insurance Expense 31/01/2017 Depreciation Expense $1,525 Accumulated Depreciation on Equipment $1,525 To record Depreciation Expense 31/01/2017 Cost of Goods Sold $1,600 Inventory $1,600 To Record cost of Goods Sold Nelso Company Multi Step Income Statement For the year ended Jan31, 2017 Detail Amount Amount Sales $111,950 Less: Sales Discount -$2,000 Sales Return & Allowance -$2,200 Net Sales $107,750 Less: Cost of Goods Sold ($38400+$1600) $40,000 Gross Profit (A) $67,750 Expenses Selling Expense Depreciation expense $1,525 Salary Expense ($35000/2) $17,500 Rent Expense ($15000/2) $7,500 Store Supplies Expense $4,050 Advertising Expense $9,800 Total Selling Epense $40,375 Administrative Expense Salary Expense ($35000/2) $17,500 Rent Expense ($15000/2) $7,500 Insurance Expense $1,400 Total Administrative Expense $26,400 Total Expense (B) $66,775 Net Income (A-B) $975 Nelso Company Single Step Income Statement For the year ended Jan31, 2017 Detail Amount Amount Net Sales $107,750 Less: Expense Cost of Goods Sold ($38400+$1600) $40,000 Selling Expense $40,375 Administrative Expense 26400 Total Expenses $106,775 Net Income $975