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

Debit Credit

Merchandise inventory $ 32,000 debit

Other (noninventory) assets 128,000 debit

Total liabilities $ 36,960 credit

Common stock 43,076 credit

Retained earnings 64,560 credit

Dividends 8,000 debit

Sales 218,880 credit

Sales discounts 3,349 debit

Sales returns and allowances 14,446 debit

Cost of goods sold 85,312 debit

Sales salaries expense 29,987 debit

Rent expenseSelling space 10,287 debit

Store supplies expense 2,627 debit

Advertising expense 18,605 debit

Office salaries expense 27,360 debit

Rent expenseOffice space 2,627 debit

Office supplies expense 876 debit

Totals $ 363,476 debit. $ 363,476 credit

On August 31, 2015, merchandise inventory was $25,824. Supplementary records of merchandising activities for the year ended August 31, 2016, reveal the following itemized costs.

Invoice cost of merchandise purchases $ 94,080

Purchase discounts received 1,976

Purchase returns and allowances 4,516

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.