Question
Valley Companys adjusted trial balance on August 31, its fiscal year-end, follows. It categorizes the following accounts as selling expenses: sales salaries expense, rent expenseselling
Valley Companys 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) | $ | 33,000 | |||||
Other (noninventory) assets | 132,000 | ||||||
Total liabilities | $ | 38,115 | |||||
K. Valley, Capital | 110,629 | ||||||
K. Valley, Withdrawals | 8,000 | ||||||
Sales | 225,720 | ||||||
Sales discounts | 3,454 | ||||||
Sales returns and allowances | 14,898 | ||||||
Cost of goods sold | 87,857 | ||||||
Sales salaries expense | 30,924 | ||||||
Rent expenseSelling space | 10,609 | ||||||
Store supplies expense | 2,709 | ||||||
Advertising expense | 19,186 | ||||||
Office salaries expense | 28,215 | ||||||
Rent expenseOffice space | 2,709 | ||||||
Office supplies expense | 903 | ||||||
Totals | $ | 374,464 | $ | 374,464 | |||
Beginning merchandise inventory was $26,631. Supplementary records of merchandising activities for the year ended August 31 reveal the following itemized costs.
Invoice cost of merchandise purchases | $ | 97,020 |
Purchases discounts received | 2,037 | |
Purchases returns and allowances | 4,657 | |
Costs of transportation-in | 3,900 | |
Required:
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 includes separate categories for net sales, cost of goods sold, selling expenses, and general and administrative expenses. 4. Prepare a single-step income statement that includes these expense categories: cost of goods sold, selling expenses, and general and administrative expenses.
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