1 answer

NEED HELP ASAP Valley Company's adjusted trial balance on August 31, its fiscal year-end, follows. It...

Question:

Valley Companys adjusted trial balance on August 31, its fiscal year-end, follows. It categorizes the following accounts as
NEED HELP ASAP
Valley Company's adjusted trial balance 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, advertising expense. It categorizes the remaining expenses as general and administrative Credit Debit $ 41,888 130, 480 8,eee $ 25,eee 104,55€ 225,600 Merchandise inventory (ending) Other (noninventory) assets Total liabilities K. Valley, Capital K. Valley, Withdrawals Sales Sales discounts Sales returns and allowances Cost of goods sold Sales salaries expense Rent expense-selling space Store supplies expense Advertising expense Office salaries expense Rent expense-Office space Office supplies expense Totals 2,250 12,90 74,500 32,eee 8,888 1,500 13, eee 28, see 3,680 400 $355,150 $355,150 Beginning merchandise inventory was $25,400Supplementary records of merchandising activities for the year ended August 31 reveal the following itemized costs. Invoice cost of merchandise purchases Purchases discounts received Purchases returns and allowances Costs of transportation in $92, eee 2, eee 4,500 4,6ee 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

Answers

1.

Sales $225,600
Less: Sales discounts 2,250
Less: Sales returns and allowances 12,000
Net sales $211,350

2.

Invoice cost of merchandise purchases $92,000
Add: Costs of transportation in 4,600
Less: Purchases discounts 2,000
Less: Purchases returns and allowances 4,500
Total cost of merchandise purchased $90,100

3.

Valley Company's

Multi Step Income Statement

Sales $225,600
Less: Sales discounts 2,250
Less: Sales returns and allowances 12,000
Net sales $211,350
Cost of goods sold: 74,500
Gross profit 136,850
Operating expenses:
Selling expenses:
Sales salaries expense 32,000
Rent expense-selling space 8,000
Store supplies expense 1,500
Advertising expense 13,000
Total selling expenses 54,500
General and administrative expenses:
Office salaries expense 28,500
Rent expense-office space 3,600
Office supplies expense 400
Total general and administrative expenses 32,500
Total operating expenses 87,000
Net operating income $49,850

4.

Valley Company

Single Step Income Statement

Revenues:
Net sales $211,350
Expenses:
Cost of goods sold 74,500
Selling expense 54,500
General and administrative expense 32,500
Total expenses 161,500
Net operating income $49,850
.

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