Valley Companys adjusted account balances from its general ledger on August 31, its fiscal year-end, follows. It categorizes the following accounts as selling expenses: sales salaries expense, rent expenseselling space, store supplies expense, and advertising expense. It categorizes the remaining expenses as general and administrative.

Adjusted Account Balances		Debit			Credit
Merchandise inventory (ending)		$	38,500
Other (noninventory) assets			154,000
Total liabilities					$	44,468
Common stock						51,825
Retained earnings						75,256
Dividends			8,000
Sales						263,340
Sales discounts			4,029
Sales returns and allowances			17,380
Cost of goods sold			101,850
Sales salaries expense			36,078
Rent expenseSelling space			12,377
Store supplies expense			3,160
Advertising expense			22,384
Office salaries expense			32,918
Rent expenseOffice space			3,160
Office supplies expense			1,053
Totals		$	434,889		$	434,889

Beginning merchandise inventory was $31,070. Supplementary records of merchandising activities for the year ended August 31 reveal the following itemized costs.

Invoice cost of merchandise purchases	$	113,190
Purchases discounts received		2,377
Purchases returns and allowances		5,433
Costs of transportation-in		3,900

rev: 09_18_2019_QC_CS-181259

Problem 4-3A (Algo) Computing merchandising amounts and formatting income statements LO C1, P4

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.

Required 1 Required 2 Required 3 Required 4 Compute the company's net sales for the year. Net Sales Sales Net sales Required 1 Required 2 Required 3 Required 4 Compute the company's total cost of merchandise purchased for the year. Cost of Merchandise Purchased Invoice cost of merchandise purchased Purchases discounts received Purchases returns and allowances Costs of transportation-in Total cost of merchandise purchased Required 1 Required 2 Required 3 Required 4 Prepare a multiple-step Income statement that includes separate categories for net sales, cost of goods sold, selling expenses, and general and administrative expenses. VALLEY COMPANY Income Statement For Year Ended August 31 Expenses Selling expenses Total selling expenses General and administrative expenses Total general and administrative expenses Total expenses Required 1 Required 2 Required 3 Required 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 Income Statement For Year Ended August 31 Expenses Total expenses