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.

Adjusted Account Balances	Debit	Credit
Merchandise inventory (ending)	$30,000
Other (non-inventory) assets	120,000
Total liabilities		$34,650
K. Valley, Capital		101,650
K. Valley, Withdrawals	8,000
Sales		205,200
Sales discounts	3,140
Sales returns and allowances	13,543
Cost of goods sold	80,224
Sales salaries expense	28,112
Rent expense-Selling space	9,644
Store supplies expense	2,462
Advertising expense	17,442
Office salaries expense	25,650
Rent expense-Office space	2,462
Office supplies expense	821
Totals	$341,500	$341,500

Beginning merchandise inventory was $24,210. Supplementary records of merchandising activities for the year ended August 31 reveal the following itemized costs.

Invoice cost of merchandise purchases	$88,200
Purchases discounts received	1,852
Purchases returns and allowances	4,234
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.