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	$ 26,100
Merchandise inventory	12,500
Store supplies	5,200
Prepaid insurance	2,800
Store equipment	42,600
Accumulated depreciationStore equipment		$ 17,300
Accounts payable		15,000
Common stock		6,000
Retained earnings		32,000
Dividends	2,150
Sales		114,800
Sales discounts	2,100
Sales returns and allowances	2,250
Cost of goods sold	38,000
Depreciation expenseStore equipment	0
Sales salaries expense	14,500
Office salaries expense	14,500
Insurance expense	0
Rent expenseSelling space	6,500
Rent expenseOffice space	6,500
Store supplies expense	0
Advertising expense	9,400
Totals	$ 185,100	$ 185,100

Additional Information:

Store supplies still available at fiscal year-end amount to $1,950.

Expired insurance, an administrative expense, is $1,550 for the fiscal year.

Depreciation expense on store equipment, a selling expense, is $1,500 for the fiscal year.

To estimate shrinkage, a physical count of ending merchandise inventory is taken. It shows $10,400 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.

4. Compute the current ratio, acid-test ratio, and gross margin ratio as of January 31. (Round your answers to 2 decimal places.)