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 Expense-Store Equipment, Sales Salaries Expense, Rent Expense-Selling Space, Store Supplies Expense, and Advertising Expense. It categorizes the remaining expenses as general and administrative. Cash. NELSON COMPANY Unadjusted Trial Balance January 31 Debit $ 18,200 13,000 Credit 5,100 Merchandise inventory Store supplies Prepaid insurance. Store equipment Accumulated depreciation-Store equipment Accounts payable Common stock. Retained earnings Dividends Sales Sales discounts 2,500 42,700 $ 19,700 13,000 5,000 26,000 2,100 116,550 1,850 2,300 Sales returns and allowances Cost of goods sold Sales salaries expense Depreciation expense-Store equipment 38,000 Office salaries expense Insurance expense Rent expense-Selling space Rent expense-Office space Store supplies expense Advertising expense Totals 13,650 13,650 9,000 9,000 9,200 $ 180,250 $ 180,250 Additional Information: a. Store supplies still available at fiscal year-end amount to $2,200. b. Expired insurance, an administrative expense, is $1,400 for the fiscal year. c. Depreciation expense on store equipment, a selling expense, is $1,525 for the fiscal year. d. To estimate shrinkage, a physical count of ending merchandise inventory is taken. It shows $11,000 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. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 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. Sales Less: Sales discounts NELSON COMPANY Income Statement For Year Ended January 31 Less: Sales returns and allowances Net sales Cost of goods sold Expenses $ 116,550 $ 1,850 2,300 4,150 112,400 Selling expenses Advertising expense $ 9,200 Depreciation expense-Store equipment Sales salaries expense Rent expense-Selling space 13,650 9,000 Store supplies expense 112,400 Required 1 Required 2 Required 3 0 31,850 Total selling expenses General and administrative expenses Office salaries expense $ 13,650 Insurance expense Rent expense-Office space 9,000 0 Total general and administrative expenses Total expenses Net income Prepare a single-step income statement for the year ended January 31. NELSON COMPANY Income Statement For Year Ended January 31 22,650 54,500 Net sales Expenses Cost of goods sold Selling expenses General and administrative expenses < Required 1 Required 3 Total expenses 0 < Required 2 Required 3