Reference no: EM132845272
Question - Valley Company's adjusted trial balance on August 31, its fiscal year-end, follows. It categorizes the following accounts as selling expenses: sales salaries expense, rent expense-selling space, store supplies expense, and advertising expense. It categorizes the remaining expenses as general and administrative.
Debit Credit
Merchandise inventory (ending) $44,000
Other (noninventory) assets 176,000
Total liabilities $50,820
Common stock 59,229
Retained earnings 84,308
Dividends 8,000
Sales 300,960
Sales discounts 4,605
Sales returns and allowances 19,863
Cost of goods sold 115,842
Sales salaries expense 41,232
Rent expense-Selling space 14,145
Store supplies expense 3,612
Advertising expense 25,582
Office salaries expense 37,620
Rent expense-Office space 3,612
Office supplies expense 1,204
Totals $495,317 $495,317
Beginning merchandise inventory was $35,508. Supplementary records of merchandising activities for the year ended August 31 reveal the following itemized costs.
Invoice cost of merchandise purchases $129,360
Purchases discounts received 2,717
Purchases returns and allowances 6,209
Costs of transportation-in 3,900
Required -
1. Compute the company's net sales for the year.
2. Compute the company's total cost of merchandise purchased for the year.
3. Compute a multiple-step income statement that includes separate categories for net sales, cost of goods sold, selling expenses, and general and administrative expenses.
4. Compute a single-step income statement that includes these expense categories: cost of goods sold, selling expenses, and general and administrative expenses.