Valley Companys adjusted trial balance on August 31, 2017, its fiscal year-end, follows. Debit Credit Merchandise inventory
Question:
Valley Company’s adjusted trial balance on August 31, 2017, its fiscal year-end, follows.
Debit | Credit | ||||||
Merchandise inventory | $ | 34,500 | |||||
Other (noninventory) assets | 138,000 | ||||||
Total liabilities | $ | 39,848 | |||||
Common stock | 10,000 | ||||||
Retained earnings | 105,114 | ||||||
Dividends | 8,000 | ||||||
Sales | 235,980 | ||||||
Sales discounts | 3,610 | ||||||
Sales returns and allowances | 15,575 | ||||||
Cost of goods sold | 91,673 | ||||||
Sales salaries expense | 32,329 | ||||||
Rent expense—Selling space | 11,091 | ||||||
Store supplies expense | 2,832 | ||||||
Advertising expense | 20,058 | ||||||
Office salaries expense | 29,498 | ||||||
Rent expense—Office space | 2,832 | ||||||
Office supplies expense | 944 | ||||||
Totals | $ | 390,942 | $ | 390,942 | |||
On August 31, 2016, merchandise inventory was $27,842. Supplementary records of merchandising activities for the year ended August 31, 2017, reveal the following itemized costs.
Invoice cost of merchandise purchases | $ | 101,430 |
Purchases discounts received | 2,130 | |
Purchases returns and allowances | 4,869 | |
Costs 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.
Fundamental Accounting Principles
ISBN: 978-1259536359
23rd edition
Authors: John Wild, Ken Shaw, Barbara Chiappett