Answer to just question 4 Required information[The following information applies to the questions displayed below.]Valley Company's adjusted account balances from its general ledger on August 31, its fiscal year-end, follows. Itcategorizes the following accounts as selling expenses: sales salaries expense, rent expense-selling space, storesupplies expense, and advertising expense. It categorizes the remaining expenses as general and administrative.Adjusted Account BalancesMerchandise inventory (ending)Other (non-inventory) assetsDebitCredit$ 35,000140,000$ 40,42569,49747,114Total liabilitiesCommon stockRetained earningsDividends8,000Sales239,4003,66315,80092,94532,79811,2522,87320,34929,9252,873Sales discountsSales returns and allowancesCost of goods soldSales salaries expenseRent expense-Selling spaceStore supplies expenseAdvertising expenseOffice salaries expenseRent expense-Office spaceOffice supplies expense958Totals$ 396,436$ 396,436Beginning merchandise inventory was $28,245. Supplementary records of merchandising activities for the year endedAugust 31 reveal the following itemized costs.Invoice cost of merchandise purchasesPurchases discounts receivedPurchases returns and allowancesCosts of transportation-in$ 102,9002,1614,9393,900 Adjusted Account BalancesMerchandise inventory (ending)Other (non-inventory) assetsTotal liabilitiesCommon stockRetained earningsDividendsSalesSales discountsSales returns and allowancesCost of goods soldSales sallaries expenseRent expense-Selling spaceStore supplies expenseAdvertising expenseOffice salaries expenseRent expense-Office spaceOffice supplies expenseChDebitCredit$ 35,000140,000$ 40,42569,49747,1148,000239,4003,66315,80092,94532,79811,2522,87320,34929,9252,873958Totals$ 396,436$ 396,436Beginning merchandise inventory was $28,245. Supplementary records of merchandising activities for the year endedAugust 31 reveal the following itemized costs.Invoice cost of merchandise purchasesPurchases discounts receivedPurchases returns and allowancesCosts of transportation-in$ 102,9002,1614,9393,900Required: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, andgeneral and administrative expenses.4. Prepare a single-step income statement that includes these expense categories: cost of goods sold, selling expenses, and generaland administrative expenses.

Net Sales - Net Sales is the sales after deducting Sales Return and Sales Discounts from Gross…

Adjusted Account Balances Merchandise inventory (ending) Other (non-inventory) assets Total liabilities Common stock Retained earnings Dividends Debit Credit $ 35,000 140,000 $ 40,425 69,497 47,114 8,000 Sales 239,400 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 3,663 15,800 92,945 32,798 11,252 2,873 20,349 29,925 2,873 958 Totals $ 396,436 $ 396,436 Beginning merchandise inventory was $28,245. Supplementary 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 $ 102,900 2,161 4,939 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.

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q