Problem 5-3A Computing merchandising amounts and formatting income statements LO C2, P4 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. Credit Debit $ 32,500 130,000 $ 37,538 109, 132 8,000 222, 300 Merchandise inventory (ending) Other (noninventory) assets Total liabilities K. Valley, Capital K. Valley, Withdrawals Sales Sales discounts Sales returns and allowances Cost of goods sold Sales salaries expense Rent expense-Selling space Store supplies expense Advertising expense Office salaries expense Rent expense-Office space Office supplies expense Totals 3, 401 14,672 86,585 30, 455 10, 448 2,668 18, 896 27, 788 2,668 889 $368, 970 $368, 970 Beginning merchandise inventory was $26,228. Supplementary records of merchandising activities for the year ended August 31 reveal the following itemized costs. Invoice cost of merchandise purchases $ 95,550 Purchases discounts received 2,007 Purchases returns and allowances 4,586 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