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 depreciationStore 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 expenseStore 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.
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