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. NELSON COMPANY Unadjusted Trial Balance January 31 Debit Credit Cash $ 19,750 Merchandise inventory 12,000 Store supplies 5,600 Prepaid insurance 2,400 Store equipment 42,700 Accumulated depreciation-Store equipment $ 16,300 Accounts payable 14,000 Common stock 4,000 Retained earnings 27,000 Dividends 2,300 Sales 115,600 Sales discounts 1,950 Sales returns and allowances 2,100 Cost of goods sold 38,000 Depreciation expense-Store equipment 0 Sales salaries expense 12,950 Office salaries expense 12,950 Insurance expense 0 Rent expense-Selling space Rent expense-office space 7,500 7,500 Store supplies expense Advertising expense Totals 9,200 $176,900 $176,900 Additional Information: a. Store supplies still available at fiscal year-end amount to $2,000. b. Expired insurance, an administrative expense, is $1,400 for the fiscal year. c. Depreciation expense on store equipment, a selling expense, is $1,625 for the fiscal year. d. To estimate shrinkage, a physical count of ending merchandise Inventory is taken. It shows $10,300 of inventory is still available at fiscal year-end. 1 of 2 Required 1 Required 2 Required 3 00:31:20 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. NELSON COMPANY Income Statement For Year Ended January 31 Sales $ 115,600 Book Less: Sales discounts $ (1,950) Less: Sales returns and allowances Net sales Print Cost of goods sold Gross profit (1,950) 113,650 39,700 73,950 Expenses erences Selling expenses Depreciation expense-Store equipment 1,625 Sales salaries expense 12,950 Rent expense-Selling space 7,500 Store supplies expense 3,600 Advertising expense 9,200 raw Total selling expenses General and administrative expenses Office salaries expense Insurance expense Rent expense-Office space Total general and administrative expenses Total expenses Net income $ 12,950 1,400 7,500 34,875 21,850 56,725 Required 1 Required 2 Required 3 Prepare a single-step income statement for the year ended January 31. NELSON COMPANY Income Statement For Year Ended January 31 Net sales Expenses Cost of goods sold 39,700 Selling expenses 12,950 General and administrative expenses 21,850 ( Total expenses Net income 74,500