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Homework answers / question archive / Valley Company’s adjusted trial balance on August 31, 2017, its fiscal year-end, follows
Valley Company’s adjusted trial balance on August 31, 2017, its fiscal year-end, follows.
| Debit | Credit | ||||||
| Merchandise inventory | $ | 41,000 | |||||
| Other (noninventory) assets | 130,400 | ||||||
| Total liabilities | $ | 25,000 | |||||
| K. Valley, Capital | 104,550 | ||||||
| K. Valley, Withdrawals | 8,000 | ||||||
| Sales | 225,600 | ||||||
| Sales discounts | 2,250 | ||||||
| Sales returns and allowances | 12,000 | ||||||
| Cost of goods sold | 74,500 | ||||||
| Sales salaries expense | 32,000 | ||||||
| Rent expense—Selling space | 8,000 | ||||||
| Store supplies expense | 1,500 | ||||||
| Advertising expense | 13,000 | ||||||
| Office salaries expense | 28,500 | ||||||
| Rent expense—Office space | 3,600 | ||||||
| Office supplies expense | 400 | ||||||
| Totals | $ | 355,150 | $ | 355,150 | |||
On August 31, 2016, merchandise inventory was $25,400. Supplementary records of merchandising activities for the year ended August 31, 2017, reveal the following itemized costs.
| Invoice cost of merchandise purchases | $ | 92,000 |
| Purchases discounts received | 2,000 | |
| Purchases returns and allowances | 4,500 | |
| Costs of transportation-in | 4,600 | |
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.
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