Valley Company\'s adjusted trial balance on August 31, 2017, its fiscal year-end

Question

Valley Company's adjusted trial balance on August 31, 2017, its fiscal year-end, follows Debit s 41,000 164,000 Credit Merchandise inventory Other (noninventory) assets Total liabilities Common stock Retained earnings Dividends Sales Sales discounts Sales returns and allowances Cost of goods sold Sales salaries expense Rent expense-Selling space Store supplies expense Advertising expense Office salaries expense Rent expense-office space Office supplies expense Totals 47,355 10,000 124,560 8,000 280,440 4,291 18,509 108,210 38,420 13,181 3,365 23,837 35,055 3,365 1,122 $462,355 $462,355 On August 31, 2016, merchandise inventory was $33,087. Supplementary records of merchandising activities for the year ended August 31, 2017, reveal the following itemized costs Invoice cost of merchandise purchases Purchases discounts received Purchases returns and allowances Costs of transportation-in $120,5460 2,531 5,786 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 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 Complete this questions by entering your answers in the below tabs.

Explanation / Answer

Req 1. Net sales: Sales revenue 280440 Less: Sales discount 4291 Less: Sales Returns and allowance 18509 Net sales revenue 257640 Rreq 2. Invoice cost of Inventory purchased 120540 Purchase discount received -2531 Purchase returns and allowance -5786 cost of Transportation n 3900 Total cost of Inventory purchased 116123 Req 3. Income Statement: Net sales revennue 257640 Less: Cost of goods sold Beginning Invenntory 33087 Total cost of Inventory purchased 116123 Total cost of Inventory available 149210 Less: ending inventory 41000 Cost of goods sold 108210 Gross margin 149430 Expenses Selling expenses Sales salaries expense 38420 Rent expenses-Selling space 13181 Store supplies 3365 Advertisement expense 23837 Total Selling expenses 78803 General and Admin expenses Office salaries expenses 35055 Rent expenses-Office expense 3365 Office supplies expense 1122 Total General and admin expense 39542 Total expense 118345 Net Operating expenses 31085 Req 4. Income Statement: Net sales revenue 257640 Less: Expenses Cost of goods sold 108210 Selling expenses 78803 General and admin expenses 39542 Total expense 226555 Net Operating income 31085

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