Answer:
Valley Company
1. The company's net sales for the year is:
= $210,511.
2. The company's total cost of merchandise purchased for the year is:
= $95,594.
3. Multiple-step Income Statement for the year ended August 31, 2018
Sales 229,140
Sales discounts (3,506)
Sales return and allowances (15,123)
Net Sales 210,511
Cost of goods sold:
Beginning inventory $ 33,500
Purchases 95,594
Goods available for sale $129,094
Less Ending inventory 27,035 89,129
Gross profit 121,382
Selling Expenses:
Sales salaries expense 31,392
Rent expense selling space 10,770
Store supplies expense 2,750
Advertising expense 19,477 64,389
General and Administrative Expenses:
Office salaries expense 28,647
Rent expense office space 2,750
Office supplies expense 917 32,314
Total expenses 96,703
Net Income 24,679
4. Single-step Income Statement for the year ended August 31, 2018
Net Sales 210,511
Cost of goods sold 89,129
Gross profit 121,382
Selling Expenses 64,389
General and Administrative Expenses 32,314
Total expenses 96,703
Net Income 24,679
Explanation:
a) Data and Calculations:
Valley Company's adjusted trial balance on August 31, 2018, its fiscal year-end, follows.
Debit Credit
Merchandise inventory $ 33,500
Other (non-inventory) assets 134,000
Total liabilities $ 38,693
Common stock 10,000
Retained earnings 102,124
Dividends 8,000
Sales 229,140
Sales discounts 3,506
Sales return and allowances 15,123
Cost of goods sold 89,129
Sales salaries expense 31,392
Rent expense selling space 10,770
Store supplies expense 2,750
Advertising expense 19,477
Office salaries expense 28,647
Rent expense office space 2,750
Office supplies expense 917
Totals $379,957 $379,957
Net Sales:
Sales 229,140
Sales discounts (3,506)
Sales return and allowances (15,123)
Net Sales 210,511
Total cost of merchandise purchased:
Purchase 98,490
Purchase discounts received (2,068)
Purchase returns and allowances (4,728)
Costs of transportation-in 3,900
Total cost of purchases = 95,594
