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 Cash Debit $ 25,200 Credit Merchandise inventory 14,500 Store supplies 5,400 Prepaid insurance 2,500 Store equipment 42,600 Accumulated depreciation-Store equipment $ 17,050 Accounts payable 18,000 Common stock 6,000 Retained earnings 31,000 Dividends 2,250 Sales 116,200 Sales discounts 2,000 Sales returns and allowances 2,000 Cost of goods sold 38,000 Depreciation expense-Store equipment 0 Sales salaries expense 15,850 Office salaries expense 15,850 Insurance expense 0 Rent expense-Selling space 6,500 Rent expense-Office space 6,500 Store supplies expense 0 Advertising expense Totals 9,100 $ 188,250 $ 188,250 Additional Information: a. Store supplies still available at fiscal year-end amount to $1,650. b. Expired insurance, an administrative expense, is $1,700 for the fiscal year. c. Depreciation expense on store equipment, a selling expense, is $1,500 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. 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.