Chapter 4 Comprehensive Problem 2 part 2 Financial Statements Valley Company's adjusted account balances from its general ledger 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. Adjusted Account Balances Debit Credit Merchandise inventory (ending). Other (noninventory) assets $ 41,000 130,400 Total liabilities..... $ 25,000 Common stock .... 10,000 Retained earnings. 94,550 Dividends 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 Beginning merchandise inventory was $25,400. Supplementary records of merchandising activities for the year ended August 31 reveal the following itemized costs. Purchases returns and allowances ..... $4,500 2,000 Costs of transportation-in.... 4,600 Invoice cost of merchandise purchases.... $92,000 Purchases discounts received..... 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.