Question
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.
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 | $ | 38,000 | |||||
Other (noninventory) assets | 152,000 | ||||||
Total liabilities | $ | 43,890 | |||||
K. Valley, Capital | 125,585 | ||||||
K. Valley, Withdrawals | 8,000 | ||||||
Sales | 259,920 | ||||||
Sales discounts | 3,977 | ||||||
Sales returns and allowances | 17,155 | ||||||
Cost of goods sold | 100,577 | ||||||
Sales salaries expense | 35,609 | ||||||
Rent expenseSelling space | 12,216 | ||||||
Store supplies expense | 3,119 | ||||||
Advertising expense | 22,093 | ||||||
Office salaries expense | 32,490 | ||||||
Rent expenseOffice space | 3,119 | ||||||
Office supplies expense | 1,040 | ||||||
Totals | $ | 429,395 | $ | 429,395 | |||
On August 31, 2016, merchandise inventory was $30,666. Supplementary records of merchandising activities for the year ended August 31, 2017, reveal the following itemized costs.
Invoice cost of merchandise purchases | $ | 111,720 |
Purchases discounts received | 2,346 | |
Purchases returns and allowances | 5,363 | |
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.
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