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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.

NELSON COMPANY

Unadjusted Trial Balance

January $31$

Debit Credit

Cash $ $22,150$

Merchandise inventory $12,500$

Store supplies $5,100$

Prepaid insurance $2,400$

Store equipment $42,500$

Accumulated depreciation$$Store equipment $ $19,050$

Accounts payable $14,000$

J$.$ Nelson, Capital $35,000$

J$.$ Nelson, Withdrawals $2,200$

Sales $114,900$

Sales discounts $2,000$

Sales returns and allowances $2,000$

Cost of goods sold $38,000$

Depreciation expense$$Store equipment $0$

Sales salaries expense $13,800$

Office salaries expense $13,800$

Insurance expense $0$

Rent expense$$Selling space $8,500$

Rent expense$$Office space $8,500$

Store supplies expense $0$

Advertising expense $9,500$

Totals $ $182,950$ $ $182,950$

Additional Information:

Store supplies still available at fiscal year$-$end amount to $$2,400.$

Expired insurance, an administrative expense, is $$1,400$ for the fiscal year.

Depreciation expense on store equipment, a selling expense, is $$1,625$ for the fiscal year.

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:

Using the above information, prepare adjusting journal entries.

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.

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