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, and advertising expense. It categorizes the remaining expenses as general and administrative.
Debit | Credit | ||||||
Merchandise inventory (ending) | $ | 45,000 | |||||
Other (noninventory) assets | 180,000 | ||||||
Total liabilities | $ | 51,975 | |||||
Common stock | 60,575 | ||||||
Retained earnings | 85,954 | ||||||
Dividends | 8,000 | ||||||
Sales | 307,800 | ||||||
Sales discounts | 4,709 | ||||||
Sales returns and allowances | 20,315 | ||||||
Cost of goods sold | 118,387 | ||||||
Sales salaries expense | 42,169 | ||||||
Rent expenseSelling space | 14,467 | ||||||
Store supplies expense | 3,694 | ||||||
Advertising expense | 26,163 | ||||||
Office salaries expense | 38,475 | ||||||
Rent expenseOffice space | 3,694 | ||||||
Office supplies expense | 1,231 | ||||||
Totals | $ | 506,304 | $ | 506,304 | |||
Beginning merchandise inventory was $36,315. Supplementary records of merchandising activities for the year ended August 31 reveal the following itemized costs.
Invoice cost of merchandise purchases | $ | 132,300 |
Purchases discounts received | 2,778 | |
Purchases returns and allowances | 6,350 | |
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.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started