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	$	19,500
Merchandise inventory		13,500
Store supplies		5,700
Prepaid insurance		2,600
Store equipment		42,600
Accumulated depreciationStore equipment				$	18,600
Accounts payable					16,000
Common stock					4,000
Retained earnings					27,000
Dividends		2,050
Sales					116,500
Sales discounts		2,000
Sales returns and allowances		2,250
Cost of goods sold		38,000
Depreciation expenseStore equipment		0
Sales salaries expense		14,950
Office salaries expense		14,950
Insurance expense		0
Rent expenseSelling space		7,000
Rent expenseOffice space		7,000
Store supplies expense		0
Advertising expense		10,000
Totals	$	182,100		$	182,100

Additional Information:

1. Store supplies still available at fiscal year-end amount to $2,900.
2. Expired insurance, an administrative expense, is $1,600 for the fiscal year.
3. Depreciation expense on store equipment, a selling expense, is $1,625 for the fiscal year.
4. 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:

1. Using the above information, prepare adjusting journal entries. 2. Prepare a multiple-step income statement for the year ended January 31. 3. Prepare a single-step income statement for the year ended January 31.