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 34,000 136,000 Credit Merchandise inventory Other (noninventory) assets Total liabilities K. Valley, Capital K. Valley, Withdrawals 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 $ 39,270 113,619 8,000 232,560 3,558 15,349 90,401 31,861 10,930 2,791 19,768 29,070 2,791 930- $385,449 $385,449 On August 31, 2016, merchandise inventory was $27,438. 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 $99,960 2,099 4,798 3,900

Explanation / Answer

1

Compute net sales for the year

$

$

Sales

232560

Sales discounts

3558

sales returns and allowances

15349

18907

213653

2

Compute the total cost of merchandise purchased during the year?

$

$

Invoice cost of Merchandise Purchase

99960

Cost of transport in

3900

Less: Purchase discount received

2099

Less: Purchase returns and allowances

4798

-6897

96963

3

Valley company

Income statement

For the august 31 2017

$

$

Sales

232560

Less: Sales discounts

3558

Less: sales returns and allowances

15439

18997

Net sales

213563

Cost of goods sold

90401

Gross profit

123162

Expense

Selling expense

Sales salaries expense

31861

Rent expense

10930

Stores supplies expense

2791

Advertsing expense

19768

Total selling expense

65350

General and administrative expense

office salaries expense

29070

Rent expense

2791

Office supplies expense

930

Total Genereal and adminstrative expense

32791

Total expense

98141

Net income

25021

4

Valley company

Income statement

For the august 31 2017

$

$

Net sales

213563

Expense

Cost of goods sold

90401

selling expense

65350

General and administrative expense

32791

188542

Net income

25021

1

Compute net sales for the year

$

$

Sales

232560

Sales discounts

3558

sales returns and allowances

15349

18907

213653

2

Compute the total cost of merchandise purchased during the year?

$

$

Invoice cost of Merchandise Purchase

99960

Cost of transport in

3900

Less: Purchase discount received

2099

Less: Purchase returns and allowances

4798

-6897

96963

3

Valley company

Income statement

For the august 31 2017

$

$

Sales

232560

Less: Sales discounts

3558

Less: sales returns and allowances

15439

18997

Net sales

213563

Cost of goods sold

90401

Gross profit

123162

Expense

Selling expense

Sales salaries expense

31861

Rent expense

10930

Stores supplies expense

2791

Advertsing expense

19768

Total selling expense

65350

General and administrative expense

office salaries expense

29070

Rent expense

2791

Office supplies expense

930

Total Genereal and adminstrative expense

32791

Total expense

98141

Net income

25021

4

Valley company

Income statement

For the august 31 2017

$

$

Net sales

213563

Expense

Cost of goods sold

90401

selling expense

65350

General and administrative expense

32791

188542

Net income

25021

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