*picture #1*On August 31, 2016, merchandise inventory was $33,894. Supplementary records of merchandising activities for the year ended August 31, 2017, reveal the following itemized costs.*picture #2*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. Invoice cost of merchandise purchases$123,480Purchases discounts received2,5935,9273,900Purchases returns and allowancesCosts of transportation-in Valley Company's adjusted trial balance on August 31, 2017, its fiscal year-end, follows.DebitCreditMerchandise inventory$ 42,000168,000Other (noninventory) assets$ 48,510137,550Total liabilitiesK. Valley, CapitalK. Valley, Withdrawals8,000Sales287,280Sales discounts4,39518,960110,75439,35713,5023,44724,41935,910Sales returns and allowancesCost of goods soldSales salaries expenseRent expense-Selling spaceStore supplies expenseAdvertising expenseOffice salaries expenseRent expense-Office spaceOffice supplies expense3,4471,149Totals$473,340$473,340

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Answered: On August 31, 2016, merchandise…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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*picture #1*

On August 31, 2016, merchandise inventory was $33,894. Supplementary records of merchandising activities for the year ended August 31, 2017, reveal the following itemized costs.

*picture #2*

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.

Invoice cost of merchandise purchases
$123,480
Purchases discounts received
2,593
5,927
3,900
Purchases returns and allowances
Costs of transportation-in

Valley Company's adjusted trial balance on August 31, 2017, its fiscal year-end, follows.
Debit
Credit
Merchandise inventory
$ 42,000
168,000
Other (noninventory) assets
$ 48,510
137,550
Total liabilities
K. Valley, Capital
K. Valley, Withdrawals
8,000
Sales
287,280
Sales discounts
4,395
18,960
110,754
39,357
13,502
3,447
24,419
35,910
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
3,447
1,149
Totals
$473,340
$473,340

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