[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 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	$ 18,150
Merchandise inventory	13,500
Store supplies	5,800
Prepaid insurance	2,400
Store equipment	42,700
Accumulated depreciationStore equipment		$ 18,200
Accounts payable		16,000
J. Nelson, Capital		30,000
J. Nelson, Withdrawals	2,050
Sales		116,300
Sales discounts	1,850
Sales returns and allowances	2,150
Cost of goods sold	38,000
Depreciation expenseStore equipment	0
Sales salaries expense	15,600
Office salaries expense	15,600
Insurance expense	0
Rent expenseSelling space	6,500
Rent expenseOffice space	6,500
Store supplies expense	0
Advertising expense	9,700
Totals	$ 180,500	$ 180,500

Additional Information:

1. Store supplies still available at fiscal year-end amount to $2,300.
2. Expired insurance, an administrative expense, is $1,550 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 $10,400 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.