Problem 4-3A Computing merchandising amounts and formatting income statements LO C2, P4

Valley Companys adjusted trial balance on August 31, 2018, its fiscal year-end, follows.

		Debit			Credit
Merchandise inventory		$	30,500
Other (noninventory) assets			122,000
Total liabilities					$	35,228
Common stock						10,000
Retained earnings						93,147
Dividends			8,000
Sales						208,620
Sales discounts			3,192
Sales returns and allowances			13,769
Cost of goods sold			81,497
Sales salaries expense			28,581
Rent expenseSelling space			9,805
Store supplies expense			2,503
Advertising expense			17,733
Office salaries expense			26,078
Rent expenseOffice space			2,503
Office supplies expense			834
Totals		$	346,995		$	346,995

On August 31, 2017, merchandise inventory was $24,614. Supplementary records of merchandising activities for the year ended August 31, 2018, reveal the following itemized costs.

Invoice cost of merchandise purchases	$	89,670
Purchases discounts received		1,883
Purchases returns and allowances		4,304
Costs of transportation-in		3,900

Required:

1. Compute the companys net sales for the year. 2. Compute the companys 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.