Prepare a single-step income statement for fiscal year

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Reference no: EM131533160

Question: The following unadjusted trial balance is prepared at fiscal year-end for FAB Products Company.

Rent expense and salaries expense are equally divided between selling activities and the general and administrative activities. FAB Products Company uses a perpetual inventory system.

Required: 1. Prepare adjusting journal entries to reflect each of the following.

a. Store supplies still available at fiscal year-end amount to $3,300.

b. Expired insurance, an administrative expense, for the fiscal year is $3,000.

c. Depreciation expense on store equipment, a selling expense, is $2,800 for the fiscal year.

d. To estimate shrinkage, a physical count of ending merchandise inventory is taken. It shows $22,200 of inventory is still available at fiscal year-end.

2. Prepare a multiple-step income statement for fiscal year 2011.

3. Prepare a single-step income statement for fiscal year 2011.

4. Compute the current ratio, acid-test ratio, and gross margin ratio as of October 31, 2011.

Reference no: EM131533160

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