The following unadjusted trial belance is prepered at financial year-end for Rex

Question

The following unadjusted trial belance is prepered at financial year-end for Rex Company Januery Store supplies Prepaid insurance Store equipment $22.350 13,000 5,700 2,200 42,500 Accounts payable T. Rex, Capital T. Rex. Withdrewals $16.350 12,000 37,000 2,250 115,100 Sales discounts Sales returns and allowances Cost of goods sold Depreciation expense-Store equipment Selaries expense Insurance expense Rent expense Store supplies expense Advertising expense 2,100 2.250 38,000 27.300 13,000 9,800 Totals 180,450 180,450 Rent expense and salaries expense are equally divided between selling activities and the general and administrative activities. Rex Company uses a perpetual inventory system. a. Store supplies still availeble at financial year-end emount to $1800 b. Expired insurance, an administrative expense, for the financial yeer is $1,750 Depreciation expense on store equipment, a selling expense, is $1,650 for the financial d. To estimete shrinkage, a physical count of ending merchandise inventory is taken. It shows $10,200 of inventory is still evailable at financial References Section Break Learning Objective: 05-A1 Compute the acid-test ratio and

Explanation / Answer

3. Since most of the question is solved, I am solving for the blanks only.

Rent expense is divided equally among selling space and office space.

Rent Expense - Selling Space = 13000 * 1/2 = 6500

Rent Expense - Office Space = 13000 * 1/2 = 6500

4. Gross Margin Ratio = Gross Profit / Net Sales

= 69950 / 110750

= 0.63

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