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 $ $15,050$

Merchandise inventory $14,500$

Store supplies $5,500$

Prepaid insurance $2,400$

Store equipment $43,000$

Accumulated depreciation$$Store equipment $ $17,250$

Accounts payable $18,000$

J$.$ Nelson, Capital $31,000$

J$.$ Nelson, Withdrawals $2,300$

Sales $115,100$

Sales discounts $1,950$

Sales returns and allowances $2,150$

Cost of goods sold $38,000$

Depreciation expense$$Store equipment $0$

Sales salaries expense $14,800$

Office salaries expense $14,800$

Insurance expense $0$

Rent expense$$Selling space $8,500$

Rent expense$$Office space $8,500$

Store supplies expense $0$

Advertising expense $9,900$

Totals $ $181,350$ $ $181,350$

Additional Information:

Store supplies still available at fiscal year$-$end amount to $$1,800.$

Expired insurance, an administrative expense, is $$1,500$ for the fiscal year.

Depreciation expense on store equipment, a selling expense, is $$1,675$ for the fiscal year.

To estimate shrinkage, a physical count of ending merchandise inventory is taken. It shows $$10,100$ of inventory is still available at fiscal year$-$end.

Required:

Using the above information, prepare adjusting journal entries.

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.

Prepare a single$-$step income statement for the year ended January $31.$