Question
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
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) | $ | 32,000 | |||||
Other (noninventory) assets | 128,000 | ||||||
Total liabilities | $ | 36,960 | |||||
Common stock | 43,076 | ||||||
Retained earnings | 64,560 | ||||||
Dividends | 8,000 | ||||||
Sales | 218,880 | ||||||
Sales discounts | 3,349 | ||||||
Sales returns and allowances | 14,446 | ||||||
Cost of goods sold | 85,312 | ||||||
Sales salaries expense | 29,987 | ||||||
Rent expenseSelling space | 10,287 | ||||||
Store supplies expense | 2,627 | ||||||
Advertising expense | 18,605 | ||||||
Office salaries expense | 27,360 | ||||||
Rent expenseOffice space | 2,627 | ||||||
Office supplies expense | 876 | ||||||
Totals | $ | 363,476 | $ | 363,476 | |||
Beginning merchandise inventory was $25,824. Supplementary records of merchandising activities for the year ended August 31 reveal the following itemized costs.
Invoice cost of merchandise purchases | $ | 94,080 |
Purchases discounts received | 1,976 | |
Purchases returns and allowances | 4,516 | |
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.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started