The following unadjusted trial balance is prepared at fiscal year-end for Foster Products Company.
Rent expense and salaries expense are equally divided between selling activities and general and administrative activities. Foster Products Company uses a perpetual inventory system.
Required
Prepare adjusting journal entries to reflect each of the following:
Store supplies still available at fiscal year-end amount to $3,700.
Expired insurance, an administrative expense, for the fiscal year is $2,800.
Depreciation expense on store equipment, a selling expense, is $3,000 for the fiscal year.
To estimate shrinkage, a physical count of ending merchandise inventory is taken. It shows $21,300 of inventory is still available at fiscal year-end.
Prepare a multiple-step income statement for fiscal year 2016 that begins with gross sales and includes separate categories for net sales, cost of goods sold, selling expenses, and general and administrative expenses.
Prepare a single-step income statement for fiscal year 2016.
Compute the current ratio, acid-test ratio, and gross margin ratio as of October 31, 2016. (Round ratios to two decimals.)
