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1. Compute the companys net sales for the year 2. Compute the companys total cost of merchandise purchased for the year. 3. Prepare a multiple-step

1. Compute the companys net sales for the year
2. Compute the companys total cost of merchandise purchased for the year.
3.

Prepare a multiple-step income statement that includes separate categories for selling expenses and for 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.

Valley Companys adjusted trial balance on August 31, 2013, its fiscal year-end, follows.

Debit Credit
Merchandise inventory $ 39,000
Other (noninventory) assets 156,000
Total liabilities $ 45,045
K. Valley, Capital 128,576
K. Valley, Withdrawals 8,000
Sales 266,760
Sales discounts 4,081
Sales returns and allowances 17,606
Cost of goods sold 103,121
Sales salaries expense 36,546
Rent expenseSelling space 12,538
Store supplies expense 3,201
Advertising expense 22,675
Office salaries expense 33,345
Rent expenseOffice space 3,201
Office supplies expense 1,067
Totals $ 440,381 $ 440,381

On August 31, 2012, merchandise inventory was $31,473. Supplementary records of merchandising activities for the year ended August 31, 2013, reveal the following itemized costs.

Invoice cost of merchandise purchases $ 114,660
Purchase discounts received 2,408
Purchase returns and allowances 5,504
Costs of transportation-in 3,900

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