Problem 5-3A Computing merchandising amounts and formatting income statements LO C2, P4

Valley Companys adjusted trial balance on August 31, 2017, its fiscal year-end, follows.

Debit Credit Merchandise inventory $ 42,500 Other (noninventory) assets 170,000 Total liabilities $ 49,088 K. Valley, Capital 139,048 K. Valley, Withdrawals 8,000 Sales 290,700 Sales discounts 4,448 Sales returns and allowances 19,186 Cost of goods sold 112,026 Sales salaries expense 39,826 Rent expenseSelling space 13,663 Store supplies expense 3,488 Advertising expense 24,710 Office salaries expense 36,338 Rent expenseOffice space 3,488 Office supplies expense 1,163 Totals $ 478,836 $ 478,836

On August 31, 2016, merchandise inventory was $34,298. Supplementary records of merchandising activities for the year ended August 31, 2017, reveal the following itemized costs.

Invoice cost of merchandise purchases $ 124,950 Purchases discounts received 2,624 Purchases returns and allowances 5,998 Costs of transportation-in 3,900

Required:

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 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.