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

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 $1,750.
2. Expired insurance, an administrative expense, for the fiscal year is $1,400.
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 $10,900 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 fiscal year 2017. 3. Prepare a single-step income statement for fiscal year 2017.

NELSON COMPANY Unadjusted Trial Balance January 31, 2017 Debit Credit S 1,000 12,500 Cash Merchandise inventory Store supplies Prepaid insurance Store equipment Accumulated depreciation-Store equipment Accounts payable 5,800 2,400 42,900 15,250 10,000 5,000 Common stock Retained earnings 27,000 Dividends 2,200 Sales 111,950 2,000 2,200 Sales discounts Sales returns and allowances Cost of goods sold Depreciation expense-Store equipment Salaries expense 38,400 35,000 Insurance expense Rent expense Store supplies expense Advertising expense 15,000 9,800 $169,200 $169,200 Totals