Question

Valley Company’s adjusted trial balance on August 31, 2015, its fiscal year-end, follows.
On August 31, 2014, merchandise inventory was $25,400. Supplementary records of merchandising activities for the year ended August 31, 2015, reveal the following itemized costs.
Invoice cost of merchandise purchases . . . . . . . $92,000
Purchase discounts received . . . . . . . . . . . . . . . . . 2,000
Purchase 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 selling expenses and for 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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  • CreatedApril 23, 2015
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