The following unadjusted trial balance is prepared at fiscal year-end for Nelson Company.

NELSON COMPANY Unadjusted Trial Balance January 31, 2013
	Debit		Credit
Cash	$	27,500
Merchandise inventory		13,500
Store supplies		5,800
Prepaid insurance		2,100
Store equipment		42,900
Accumulated depreciationStore equipment			$	16,050
Accounts payable				13,000
J. Nelson, Capital				39,000
J. Nelson, Withdrawals		2,300
Sales				116,100
Sales discounts		2,000
Sales returns and allowances		2,150
Cost of goods sold		38,000
Depreciation expenseStore equipment		0
Salaries expense		25,700
Insurance expense		0
Rent expense		13,000
Store supplies expense		0
Advertising expense		9,200
Totals	$	184,150	$	184,150

Rent expense and salaries expense are equally divided between selling activities and the general and administrative activities. Nelson Company uses a perpetual inventory system.

a.	Store supplies still available at fiscal year-end amount to $2,650.
b.	Expired insurance, an administrative expense, for the fiscal year is $1,450.
c.	Depreciation expense on store equipment, a selling expense, is $1,600 for the fiscal year.
d.	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.

1.

Using the above information prepare adjusting journal entries:

2.

Prepare a multiple-step income statement for fiscal year 2013.