NELSON COMPANY Unadjusted Trial Balance January 31 Credit Debit $ 26,500 13,500 5,900 2,600 42,500 $ 18,500 17,000 5,000 28,000 2,150 116,450 Cash Merchandise inventory Store supplies Prepaid insurance Store equipment Accumulated depreciation-Store equipment Accounts payable Common stock Retained earnings Dividends Sales Sales discounts Sales returns and allowances 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 2,050 2,250 38,000 13,050 13,050 @ 7,000 7,000 0 9,400 $ 184,950 $ 184,950 Additional Information: a. Store supplies still available at fiscal year-end amount to $1,600. b. Expired insurance, an administrative expense, is $1,400 for the fiscal year. 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 $10,400 of inventory is still available at fiscal year-end. Required: 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. Answer is not complete. Categories tel Sales, goods sold, semmy expenses, genera drid de S 116,450 2.250 2,050 NELSON COMPANY Income Statement For Year Ended January 31 Sales Less: Sales returns and allowances S Less: Sales discounts Net sales Cost of goods sold Gross profit Expenses Selling expenses Sales salaries expense S Rent expense-Selling space Store supplies expense Advertising expense Depreciation expense-Store equipment 4,300 112,150 27,600 84,550 13,050 7,000 1,600 9,400 1,600 32,650 Total selling expenses General and administrative expenses Office salaries expense Insurance expense Rent expense-Office space IS 13,050 1,400 7,000 Total general and administrative expenses Total expenses Net income 21,450 54,100