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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

Accounting

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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