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Valley Company's adjusted trial balance on August 31, its fiscal...

Valley Company's adjusted trial balance on August 31, its fiscal year-end, follows. It categorizes the following accounts as selling expenses: sales salaries expense, rent expense—selling space, store supplies expense, and advertising expense. It categorizes the remaining expenses as general and administrative.

 

  DebitCreditMerchandise inventory (ending) $40,000    Other (noninventory) assets  160,000    Total liabilities    $46,200 Common stock     53,844 Retained earnings     77,723 Dividends  8,000    Sales     273,600 Sales discounts  4,186    Sales returns and allowances  18,058    Cost of goods sold  105,665    Sales salaries expense  37,483    Rent expense—Selling space  12,859    Store supplies expense  3,283    Advertising expense  23,256    Office salaries expense  34,200    Rent expense—Office space  3,283    Office supplies expense  1,094    Totals $451,367 $451,367 

 

Beginning merchandise inventory was $32,280. Supplementary records of merchandising activities for the year ended August 31 reveal the following itemized costs.

 

   Invoice cost of merchandise purchases$117,600Purchases discounts received 2,470Purchases returns and allowances 5,645Costs of transportation-in 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.

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