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[The following information applies to the questions displayed below.] 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	$	32,850
Merchandise inventory		13,000
Store supplies		5,400
Prepaid insurance		2,400
Store equipment		42,600
Accumulated depreciationStore equipment				$	19,900
Accounts payable					18,000
Common stock					4,000
Retained earnings					30,000
Dividends		2,150
Sales					115,950
Sales discounts		2,050
Sales returns and allowances		2,100
Cost of goods sold		38,000
Depreciation expenseStore equipment		0
Sales salaries expense		12,550
Office salaries expense		12,550
Insurance expense		0
Rent expenseSelling space		6,500
Rent expenseOffice space		6,500
Store supplies expense		0
Advertising expense		9,200
Totals	$	187,850		$	187,850

Additional Information:

1. Store supplies still available at fiscal year-end amount to $2,500.
2. Expired insurance, an administrative expense, is $1,400 for the fiscal year.
3. Depreciation expense on store equipment, a selling expense, is $1,650 for the fiscal year.
4. To estimate shrinkage, a physical count of ending merchandise inventory is taken. It shows $10,000 of inventory is still available at fiscal year-end.

Required 3 only

3. Prepare a single-step income statement for the year ended January 31.

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