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.

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, and advertising expense. It categorizes the remaining expenses as general and administrative. Credit Debit $ 43,500 174,000 $ 50,243 58,556 83,482 8,000 297,540 Merchandise inventory (ending) Other (noninventory) assets Total liabilities Common stock Retained earnings Dividends 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 4,552 19,638 114,570 40,763 13,984 3,570 25, 291 37, 193 3,570 1,199 $489,821 $489,821 Beginning merchandise inventory was $35,105. Supplementary records of merchandising activities for the year ended August 31 reveal the following itemized costs. Invoice cost of merchandise purchases Purchases discounts received Purchases returns and allowances Costs of transportation-in $127,890 2,686 6,139 3,900