The following unadjusted trial balance is prepared at financial year-end for Rex Company. Credit 2 C

The following unadjusted trial balance is prepared at financial year-end for Rex Company. Credit 2 C

The following unadjusted trial balance is prepared at financial year-end for Rex Company. Credit 2 Cash DORSOD E 8X1 B 100 Aral REX COMPANY Unadjusted Trial Balance January 31, 2015 Dobit $ 2,200 3 Merchandise inventory 11,500 Store supplies 4.800 Prepaid insurance 2,300 6 Store equipment 41.900 7 Accumulated depreciation-Store equipment 8 Accounts payable 9 T. Rex, Capital 10 T. Rex, Withdrawals 2,000 11 Sales 12 Sales discounts 1,000 13 Sales returns and allowances 2,000 14 Cost of goods sold 37,400 15 Depreciation expense-Store equipment 16 Salaries expense 31.000 17 Insurance expense 18 Rent expense 14,000 19 Store supplies expense 20 Advertising expense 9,900 21 Totals $160,000 $ 15,000 9,000 32,000 104,000 $100,000 Rent expense and salaries expense are equally divided between selling activities and the general and administrative activities. Rex Company uses a perpetual inventory system. Sequired 1. Prepare adjusting journal entries to reflect each of the following: a. Store supplies still available at financial year-end amount to $1,650. b. Expired insurance, an administrative expense, for the financial year is $1,500. c. Depreciation expense on store equipment, a selling expense, is $1,400 for the financial year. d. To estimate shrinkage, a physical count of ending merchandise inventory is taken. It shows $11,100 of inventory is still available at financial year-end. 2. Prepare an income statement for financial year 2015. 3. Compute the current ratio, acid-test ratio, and gross margin ratio as at January 31, 2015.

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