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.Credit3:21Adjusted Account BalancesMerchandise inventory (ending)Other (non-inventory) assetsTotal liabilities2Common stockRetained earningsDividendsSalesSales discountsSales returns and allowancesCost of goods soldSales salaries expenseRent expense-Selling spaceStore supplies expenseAdvertising expenseOffice salaries expenseRent expense-Office spaceOffice supplies expenseTotalsInvoice cost of merchandise purchasesPurchases discounts receivedPurchases returns and allowancesCosts of transportation-inF2Beginning merchandise inventory was $33,894. Supplementary records of merchandising activities for the year endedAugust 31 reveal the following itemized costs.#380F3Debit$ 42,000168,000$48,0004,39518,960110,75439,357Required:Prepare closing entries as of August 31 (the perpetual inventory system is used).888F413,5023,44724,41935,9103,4471,149$ 473,340 $ 473,340$ 48,51081,01356,537287,280$ 123,4802,5935,9273,900%5< PrevAF5MacBook Air< 6B4 of 6AF6&Next >87F7* CODIL8FB

1. Sales $287,280 Less: Sales discounts (4,395) Less: Sales returns and allowances (18,960)…

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10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Sales	$287,280
Less: Sales discounts	(4,395)
Less: Sales returns and allowances	(18,960)
Net sales	$263,925

Invoice cost of merchandise inventory	$123,480
Less: Purchase discounts	(2,593)
Less: Purchase returns and allowances	(5,927)
Add: Cost of transportation in	3,900
Cost of merchandise purchased	$118,860

VALLEY COMPANY Income Statement For The Year Ended August 31, 2017
Sales		$287,280
Less: Sales discounts	4,395
Less: Sales returns and allowances	18,960
		23,355
Net sales		263,925
Cost of goods sold		110,754
Gross profit		153,171
Selling expense:
Salaries expense	39,357
Rent expense-selling space	13,502
Store supplies expense	3,447
Advertising expense	24,419
Total selling expenses		80,725
General and administrative expenses:
Office salaries expense	35,910
Rent expense-office space	3,447
Office supplies expense	1,149
Total general and administrative expenses		40,506
Net income		$31940