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The following unadjusted trial balance is prepared at fiscal year-end for Nelson Company. NELSON COMPANY Unadjusted Trial Balance January 31, 2015 Credit Debit S 1,000 2 Cash 3 Merchandise inventory 4 Store supplies 5 Prepaid insurance 6 Store equipment 7 Accumulated depreciation-Store equipment 5,800 2,400 42,900 Accounts payable 9 Common stock 10 Retained earnings s 15,250 10,000 5,000 27,000 2,200 111,950 12 Sales 13 Sales discounts 14 Sales returns and allowances 15 Cost of goods sold 16 Depreciation expense-Store equipment 17 Salaries expense 18 Insurance expense 19 Rent expense 20 Store supplies expense 21 Advertising expense 22 Totals 38,400 15,000 9,800 $169.200 Rent expense and salaries expense are equally divided between selling activities and the general and administrative activities. Nelson Company uses a perpetual inventory system. Required 1. Prepare adjusting journal entries to reflect each of the following: 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. 2. Prepare a multiple-step income statement for fiscal vear 2015

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