1. Using the above information, prepare adjusting journal entries.

2. Prepare a multiple-step income statement for the year ended January 31 that begins with gross sales and includes separate categories for net sales, cost of goods sold, selling expenses, and general and administrative expenses.

3. Prepare a single-step income statement for the year ended January 31.

Required information [The following information applies to the questions displayed below.] The following unadjusted trial balance is prepared at fiscal year-end for Nelson Company. Nelson Company uses a perpetual inventory system. It categorizes the following accounts as selling expenses: Depreciation Expense-Store Equipment, Sales Salaries Expense, Rent Expense-Selling Space, Store Supplies Expense, and Advertising Expense. It categorizes the remaining expenses as general and administrative. Cash Merchandise inventory. Store supplies Prepaid insurance Store equipment Accumulated depreciation-Store equipment Accounts payable J. Nelson, Capital J. Nelson, Withdrawals Sales Sales discounts Sales returns and allowances NELSON COMPANY Unadjusted Trial Balance January 31 Cost of goods sold Depreciation expense-Store equipment Sales salaries expense Office salaries expense Insurance expense Rent expense-Selling space Rent expense-Office space Store supplies expense Advertising expense Totals Additional Information: Debit $ 18,550 14,500 5,200 2,200 42,800 2,200 1,900 2,300 38,000 14,900 14,900 0 7,500 7,500 0 9,700 $ 182,150 Credit $ 17,050 16,000 33,000 116,100 $ 182,150 a. Store supplies still available at fiscal year-end amount to $1,600. b. Expired insurance, an administrative expense, is $1,450 for the fiscal year. c. Depreciation expense on store equipment, a selling expense, is $1,575 for the fiscal year. d. To estimate shrinkage, a physical count of ending merchandise inventory is taken. It shows $10,500 of inventory is still available at fiscal year-end. Required 1 Required 2 Required 3 Using the above information, prepare adjusting journal entries. View transaction list Journal entry worksheet 1 2 Store supplies still available at fiscal year-end amount to $1,600. Transaction a. 3 Note: Enter debits before credits. Record entry General Journal Clear entry Debit Credit View general journal > Desired 1 II Required information categories for net sales, cost of goods sold, selling expenses, and general and administrative expenses. NELSON COMPANY Income Statement For Year Ended January 31 Expenses II Selling expenses Total selling expenses General and administrative expenses Total general and administrative expenses Total expenses Required information 3. Prepare a single-step income statement for the year ended January 31. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Prepare a single-step income statement for the year ended January 31. Expenses Total expenses NELSON COMPANY Income Statement For Year Ended January 31