Valley Companys adjusted trial balance on August 31, 2016, its fiscal year-end, follows.

Debit

Credit

Merchandise inventory $37,000

Other (noninventory) assets 148,000

Total liabilities $42,735

Common stock 49,806

Retained earnings 72,788

Dividends 8,000

Sales 253,080

Sales discounts 3,872

Sales returns and allowances 16,703

Cost of goods sold 98,034

Sales salaries expense 34,672

Rent expenseSelling space 11,895

Store supplies expense 3,037

Advertising expense 21,512

Office salaries expense 31,635

Rent expenseOffice space 3,037

Office supplies expense 1,012

Totals $418,409 $418,409

On August 31, 2015, merchandise inventory was $29,859. Supplementary records of merchandising activities for the year ended August 31, 2016, reveal the following itemized costs.

Invoice cost of merchandise purchases $ 108,780

Purchase discounts received 2,284

Purchase returns and allowances 5,221

Costs of transportation-in 3,900

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 begins with net sales and includes separate categories for: cost of goods sold, selling expenses, and general and administrative expenses.