Reference no: EM132325752
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, advertising expense. It categorizes the remaining expenses as general and administrative.
Debit Credit
Merchandise inventory (ending) $40,500
Other (noninventory) assets 162,000
Total liabilities $46,778
K. Valley, Capital 133,065
K. Valley, Withdrawals 8,000
Sales 277,020
Sales discounts 4,238
Sales returns and allowances 18,283
Cost of goods sold 106,939
Sales salaries expense 37,952
Rent expense-Selling space 13,020
Store supplies expense 3,324
Advertising expense 23,547
Office salaries expense 34,628
Rent expense-Office space 3,324
Office supplies expense 1,108
Totals $456,863 $456,863
Beginning merchandise inventory was $32,684. Supplementary records of merchandising activities for the year ended August 31 reveal the following itemized costs.
Invoice cost of merchandise purchases $119,070
Purchases discounts received 2,500
Purchases returns and allowances 5,715
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 multiple-step income statement that includes separate categories for net sales, cost of goods sold, selling expenses, and general and administrative expenses.
4. Prepare single-step income statement that includes these expense categories: cost of goods sold, selling expenses, and general and administrative expenses.