Valley Companys adjusted trial balance on August 31, 2016, its fiscal year-end, follows. (D FOR DEBIT C FOR CREDIT)

Merchandise inventory $ 36,000 D

Other (noninventory) assets 144,000 D

Total liabilities $ 41,580 C

Common stock 48,460 C

Retained earnings 71,141 C

Dividends 8,000 D

Sales 246,240 C

Sales discounts 3,767 D

Sales returns and allowances 16,252 D

Cost of goods sold 95,489 D

Sales salaries expense 33,735 D

Rent expenseSelling space 11,573 D

Store supplies expense 2,955 D

Advertising expense 20,930 D

Office salaries expense 30,780 D

Rent expenseOffice space 2,955 D

Office supplies expense 985 D

Totals $ 407,421 D....$ 407,421 C

On August 31, 2015, merchandise inventory was $29,052. Supplementary records of merchandising activities for the year ended August 31, 2016, reveal the following itemized costs.

Invoice cost of merchandise purchases $ 105,840

Purchase discounts received 2,223

Purchase returns and allowances 5,080

Costs of transportation-in 3,900

1. 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.