Answer Happy

int rences the following unadjusted tnal balance is prepared at fiscal year-end for Neison Company. Neison 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. NELSON COMPANY Unadjusted Trial Balance January 31 Debit Credit Cash $ 24,700 Merchandise inventory Store supplies 15,000 5,400 Prepaid insurance 2,500 Store equipment 42,800 Accumulated depreciation-store equipment $ 18,050 Accounts payable 13,000 J. Nelson, Capital 38,000 J. Nelson, Withdrawals 2,200 Sales 115,500 Sales discounts 1,900 Sales returns and allowances 2,250 Cost of goods sold 38,000 Depreciation expense-Store equipment 0 Sales salaries expense 14,000 office salaries expense Insurance expense 14,000 0 6,000 Rent expense-delling space 6,000 0 Rent expense-Office space Store supplies expense Advertising expense Totals 9,000 $184,550 $ 104,550 Additional Information: a. Store supplies still available at fiscal year-end amount to $2,750. b. Expired insurance, an administrative expense, is $1,750 for the fiscal year c. Depreciation expense on store equipment, a selling expense, is $1,600 for the fiscal year. d. To estimate shrinkage, a physical count of ending merchandise inventory is taken. It shows $10,300 of inventory is still available at fiscal year-end. Ch
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.