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	$ 28,100
Merchandise inventory	12,500
Store supplies	5,400
Prepaid insurance	2,600
Store equipment	42,900
Accumulated depreciationStore equipment		$ 19,350
Accounts payable		15,000
J. Nelson, Capital		33,000
J. Nelson, Withdrawals	2,150
Sales		115,950
Sales discounts	1,950
Sales returns and allowances	2,100
Cost of goods sold	38,000
Depreciation expenseStore equipment	0
Sales salaries expense	13,000
Office salaries expense	13,000
Insurance expense	0
Rent expenseSelling space	6,000
Rent expenseOffice space	6,000
Store supplies expense	0
Advertising expense	9,600
Totals	$ 183,300	$ 183,300

Additional Information:

1. Store supplies still available at fiscal year-end amount to $2,700.
2. Expired insurance, an administrative expense, is $1,400 for the fiscal year.
3. Depreciation expense on store equipment, a selling expense, is $1,600 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: a. Using the above additional information, prepare adjusting journal entries. b. 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. c. Prepare a single-step income statement for the year ended January 31.

d. Compute the current ratio, acid-test ratio, and gross margin ratio as of January 31.