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The following unadjusted trial balance is prepared at fiscal year-end for Nelson Company. NELSON COMPANY Unadjusted Trial Balance January 31, 2017 Debit Credit Cash $

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

NELSON COMPANY Unadjusted Trial Balance January 31, 2017
Debit Credit
Cash $ 46,550
Merchandise inventory 13,500
Store supplies 5,600
Prepaid insurance 2,300
Store equipment 42,600
Accumulated depreciationStore equipment $ 18,450
Accounts payable 18,000
Common stock 3,600
Retained earnings 18,000
Dividends 2,100
Sales 147,950
Sales discounts 1,900
Sales returns and allowances 2,150
Cost of goods sold 38,000
Depreciation expenseStore equipment 0
Salaries expense 26,600
Insurance expense 0
Rent expense 15,000
Store supplies expense 0
Advertising expense 9,700
Totals $ 206,000 $ 206,000

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

Additional Information:

  1. Store supplies still available at fiscal year-end amount to $2,350.
  2. Expired insurance, an administrative expense, for the fiscal year is $1,750.
  3. Depreciation expense on store equipment, a selling expense, is $1,525 for the fiscal year.
  4. To estimate shrinkage, a physical count of ending merchandise inventory is taken. It shows $10,200 of inventory is still available at fiscal year-end.

rev: 10_24_2018_QC_CS-145044

Required:

1. Using the above information prepare adjusting journal entries: 2. Prepare a multiple-step income statement for fiscal year 2017. 3. Prepare a single-step income statement for fiscal year 2017.

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