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	$ 20,750
Merchandise inventory	12,000
Store supplies	5,700
Prepaid insurance	2,200
Store equipment	42,600
Accumulated depreciationStore equipment		$ 19,550
Accounts payable		16,000
Common stock		5,000
Retained earnings		26,000
Dividends	2,000
Sales		116,600
Sales discounts	1,850
Sales returns and allowances	2,050
Cost of goods sold	38,000
Depreciation expenseStore equipment	0
Sales salaries expense	14,050
Office salaries expense	14,050
Insurance expense	0
Rent expenseSelling space	9,000
Rent expenseOffice space	9,000
Store supplies expense	0
Advertising expense	9,900
Totals	$ 183,150	$ 183,150

Additional Information:

1. Store supplies still available at fiscal year-end amount to $2,400.
2. Expired insurance, an administrative expense, is $1,350 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 $10,700 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.