Reference no: EM133052902
Question - Valley Company's adjusted account balances from its general ledger 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.
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Adjusted Account Balances
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Debit
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Credit
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Merchandise inventory (ending)
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$30,000
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|
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Other (non-inventory) assets
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120,000
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Total liabilities
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$34,650
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K. Valley, Capital
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101,650
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K. Valley, Withdrawals
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8,000
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Sales
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205,200
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Sales discounts
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3,140
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Sales returns and allowances
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13,543
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Cost of goods sold
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80,224
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Sales salaries expense
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28,112
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Rent expense-Selling space
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9,644
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Store supplies expense
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2,462
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Advertising expense
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17,442
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Office salaries expense
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25,650
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Rent expense-Office space
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2,462
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Office supplies expense
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821
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Totals
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$341,500
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$341,500
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Beginning merchandise inventory was $24,210. Supplementary records of merchandising activities for the year ended August 31 reveal the following itemized costs.
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Invoice cost of merchandise purchases
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$88,200
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Purchases discounts received
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1,852
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Purchases returns and allowances
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4,234
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Costs of transportation-in
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3,900
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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.