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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 ExpenseStore Equipment, Sales Salaries Expense, Rent ExpenseSelling 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	$ 12,350
Merchandise inventory	15,000
Store supplies	5,900
Prepaid insurance	2,800
Store equipment	42,900
Accumulated depreciationStore equipment		$ 19,400
Accounts payable		13,000
Common stock		5,000
Retained earnings		29,000
Dividends	2,150
Sales		115,400
Sales discounts	1,950
Sales returns and allowances	2,050
Cost of goods sold	38,000
Depreciation expenseStore equipment	0
Sales salaries expense	15,700
Office salaries expense	15,700
Insurance expense	0
Rent expenseSelling space	9,000
Rent expenseOffice space	9,000
Store supplies expense	0
Advertising expense	9,300
Totals	$ 181,800	$ 181,800

Additional Information:

1. Store supplies still available at fiscal year-end amount to $1,550.
2. Expired insurance, an administrative expense, is $1,500 for the fiscal year.
3. Depreciation expense on store equipment, a selling expense, is $1,575 for the fiscal year.
4. To estimate shrinkage, a physical count of ending merchandise inventory is taken. It shows $10,700 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.