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		$	43,500
Other (noninventory) assets			174,000
Total liabilities					$	50,243
Common stock						10,000
Retained earnings						132,038
Dividends			8,000
Sales						297,540
Sales discounts			4,552
Sales returns and allowances			19,638
Cost of goods sold			114,570
Sales salaries expense			40,763
Rent expenseSelling space			13,984
Store supplies expense			3,570
Advertising expense			25,291
Office salaries expense			37,193
Rent expenseOffice space			3,570
Office supplies expense			1,190
Totals		$	489,821		$	489,821

On August 31, 2017, merchandise inventory was $35,105. Supplementary records of merchandising activities for the year ended August 31, 2018, reveal the following itemized costs.

Invoice cost of merchandise purchases	$	127,890
Purchases discounts received		2,686
Purchases returns and allowances		6,139
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.