Valley Company's adjusted trial balance on August $31,$ its fiscal year$-$end, follows. It categorizes the fol$-$

lowing accounts as sclling expenses: Sales Salaries Expense, Rent Expense$-$Selling Space, Store Supplies

Expense, and Advertising Expense. It categorizes the remaining expenses as general and administrative.

Beginning merchandise inventory was $$25,400.$ Supplementary records of merchandising activities for the

year ended August $31$ reveal the following itemized costs.

Invoice cost of merchandise purchases

$$92,000$

Purchases discounts received

$2,000$

Purchases retums and allowances.

Costs of transportation$-$in$.$

$........4,600$

Problem $5-3$A

Computing merchandising

amounts and formatting

income statements

Required

Compute the company's net sales for the year.

Compute the company's total cost of merchandise purchased for the year.

Prepare a multiple$-$step income statement that includes separate categories for net sales, cost of goods

sold, selling expenses, and general and administrative expenses.

Prepare a single$-$step income statement that includes these expense categories: cost of goods sold, sell$-$

$(3)$ Gross profit. $$136,850$ :

Net income. $$49,850$

$(4)$ Total expenses. $$151,500$

ing 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, advertising expense. It categorizes the remaining expenses as general and administrative. $[[,$Debit,Credit$],[$Merchandise inventory $($ending$),41,100,],[$Other $($noninventory$)$ assets,$42,880,],[$Total liabilities,,$25,100$