Valley Companys adjusted trial balance on August 31, 2015

Valley Company’s adjusted trial balance on August 31, 2015, its fiscal year-end, follows.

Debit               Credit

  Merchandise inventory                                             $36,000

 Other (noninventory) assets                                       144,000

 Total liabilities                                                                                    $41,580

  Common stock                                                                                  48,460

  Retained earnings                                                                             71,141

  Dividends                                                                 8,000

 Sales                                                                                                   246,240

 Sales discounts                                                           3,767

 Sales returns and allowances                                     16,252

 Cost of goods sold                                                     95,489

 Sales salaries expense                                     33,735

 Rent expense—Selling space                                     11,573

 Store supplies expense                                               2,955

 Advertising expense                                                  20,930

 Office salaries expense                                              30,780

 Rent expense—Office space                                     2,955

 Office supplies expense                                             985

   Totals                                                                       $407,421         $407,421

Invoice cost of merchandise purchases $ 105,840  

Purchase discounts received 2,223  

Purchase returns and allowances 5,080  

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 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.

TUTORIAL PREVIEW

1... Net sales:

Sales	$246,240
Less:       Sales discounts	(3,767)
Sales returns and allowances	(16,252)
Net sales	$226,221

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