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 expenseselling space, store supplies expense, advertising expense. It categorizes the remaining expenses as general and administrative.

Debit Credit

Merchandise inventory (ending) $40,500

Other (noninventory) assets 162,000

Total liabilities $46,778

K. Valley, Capital 133,065

K. Valley, Withdrawals 8,000

Sales 277,020

Sales discounts 4,238

Sales returns and allowances 18,283

Cost of goods sold 106,939

Sales salaries expense 37,952

Rent expenseSelling space 13,020

Store supplies expense 3,324

Advertising expense 23,547

Office salaries expense 34,628

Rent expenseOffice space 3,324

Office supplies expense 1,108

Totals $456,863 $456,863

Beginning merchandise inventory was $32,684. Supplementary records of merchandising activities for the year ended August 31 reveal the following itemized costs.

Invoice cost of merchandise purchases $119,070

Purchases discounts received 2,500

Purchases returns and allowances 5,715

Costs of transportation-in 3,900

Required:

1.Compute the company's net sales for the year.

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

3.Prepare multiple-step income statement that includes separate categories for net sales, cost of goods sold, selling expenses, and general and administrative expenses.

4.Prepare single-step income statement that includes these expense categories: cost of goods sold, selling expenses, and general and administrative expenses.