Reference no: EM133044410
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) $40,000
Other (noninventory) assets 160,000
Total liabilities $46,200
Common stock 53,844
Retained earnings 77,723
Dividends 8,000
Sales 273,600
Sales discounts 4,186
Sales returns and allowances 18,058
Cost of goods sold 105,665
Sales salaries expense 37,483
Rent expense-Selling space 12,859
Store supplies expense 3,283
Advertising expense 23,256
Office salaries expense 34,200
Rent expense-Office space 3,283
Office supplies expense 1,094
Totals $451,367 $451,367
Beginning merchandise inventory was $32,280. Supplementary records of merchandising activities for the year ended August 31 reveal the following itemized costs.
Invoice cost of merchandise purchases $117,600
Purchases discounts received 2,470
Purchases returns and allowances 5,645
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. Prepare a multiple-step income statement that includes separate categories for net sales, cost of goods sold, selling expenses, and general and administrative expenses.
4. Prepare a single-step income statement that includes these expense categories: cost of goods sold, selling expenses, and general and administrative expenses.