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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	$ 1,000
Merchandise inventory	12,500
Store supplies	5,800
Prepaid insurance	2,400
Store equipment	42,900
Accumulated depreciationStore equipment		$ 15,250
Accounts payable		10,000
Common stock		5,000
Retained earnings		27,000
Dividends	2,200
Sales		111,950
Sales discounts	2,000
Sales returns and allowances	2,200
Cost of goods sold	38,400
Depreciation expenseStore equipment	0
Sales salaries expense	17,500
Office salaries expense	17,500
Insurance expense	0
Rent expenseSelling space	7,500
Rent expenseOffice space	7,500
Store supplies expense	0
Advertising expense	9,800
Totals	$ 169,200	$ 169,200

Additional Information:

1. Store supplies still available at fiscal year-end amount to $1,750.
2. Expired insurance, an administrative expense, is $1,400 for the fiscal year.
3. Depreciation expense on store equipment, a selling expense, is $1,525 for the fiscal year.
4. To estimate shrinkage, a physical count of ending merchandise inventory is taken. It shows $10,900 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.