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	$ 19,300
Merchandise inventory	14,500
Store supplies	5,800
Prepaid insurance	2,700
Store equipment	42,900
Accumulated depreciationStore equipment		$ 16,300
Accounts payable		16,000
Common stock		6,000
Retained earnings		28,000
Dividends	2,100
Sales		116,000
Sales discounts	1,850
Sales returns and allowances	2,050
Cost of goods sold	38,000
Depreciation expenseStore equipment	0
Sales salaries expense	15,150
Office salaries expense	15,150
Insurance expense	0
Rent expenseSelling space	6,500
Rent expenseOffice space	6,500
Store supplies expense	0
Advertising expense	9,800
Totals	$ 182,300	$ 182,300

Additional Information:

1. Store supplies still available at fiscal year-end amount to $2,800.
2. Expired insurance, an administrative expense, is $1,700 for the fiscal year.
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 $10,100 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.