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	$	22,050
Merchandise inventory		15,000
Store supplies		5,300
Prepaid insurance		2,700
Store equipment		42,600
Accumulated depreciationStore equipment				$	18,300
Accounts payable					16,000
Common stock					4,000
Retained earnings					31,000
Dividends		2,200
Sales					116,400
Sales discounts		2,050
Sales returns and allowances		2,000
Cost of goods sold		38,000
Depreciation expenseStore equipment		0
Sales salaries expense		14,350
Office salaries expense		14,350
Insurance expense		0
Rent expenseSelling space		8,000
Rent expenseOffice space		8,000
Store supplies expense		0
Advertising expense		9,100
Totals	$	185,700		$	185,700

Additional Information:

1. Store supplies still available at fiscal year-end amount to $2,650.
2. Expired insurance, an administrative expense, is $1,750 for the fiscal year.
3. Depreciation expense on store equipment, a selling expense, is $1,550 for the fiscal year.
4. To estimate shrinkage, a physical count of ending merchandise inventory is taken. It shows $10,800 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.

Additional Information:

1. Store supplies still available at fiscal year-end amount to $2,650.
2. Expired insurance, an administrative expense, is $1,750 for the fiscal year.
3. Depreciation expense on store equipment, a selling expense, is $1,550 for the fiscal year.
4. To estimate shrinkage, a physical count of ending merchandise inventory is taken. It shows $10,800 of inventory is still available at fiscal year-end.