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The following article will add knowledge about “Valley company’s adjusted trial balance on August 31, 2017, its fiscal year-end, follows.“. Let’s not forget to look at the content!
Question
Valley company’s adjusted trial balance on august 31, 2017, its fiscal year-end, follows.
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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 $41,000 130,400 $ 25,000 104,550 8.000 225,600 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 2,250 12.000 74,500 32,000 8,000 1,500 13.000 28,500 3,600 400 $355,150 $355,150
Beginning merchandise inventory was $25,400. 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 $92,000 2,000 4.500 4,600
Required:
- Compute the company’s net sales for the year.
- Compute the company’s total cost of merchandise purchased for the year
- Prepare a multiple-step income statement that includes separate categories for net sales, cost of goods sold, selling expenses, and general and administrative expenses.
- Prepare a single-step income statement that includes these expense categories: cost of goods sold, selling expenses, and general and administrative
Answer “Valley company’s adjusted trial balance on August 31, 2017, its fiscal year-end, follows”.
Single and Multiple-step Income Statements:
To determine the financial results of the business, the single-step income statement presents revenues and expenses. When preparing multiple-step income statements, revenues and expenses can be classified as operating income, operating expenses, non-operating income, and non-operating expense.
Answer
Part 1: Calculation of net sales for Valley Company during the year ending August 31, 2017.
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Net sales | $211350 |
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Net sales | |
Sales | 225600 |
Less: Sales discounts | (2250) |
Less: Sales returns and allowances | (12000) |
Net sales | $211350 |
Part 2: Calculation of the total merchandise cost for the year.
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Cost of Merchandise purchased | |
Invoice cost of merchandise purchased | 92000 |
Purchase discounts received | (2000) |
Purchase returns and allowances | (4500) |
Costs of transportation-in | 4600 |
Total cost of merchandise purchased | $90100 |
Part 3: Multi-step income statement.
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VALLEY COMPANY Income Statement For Year Ended August 31 | ||
Sales | 225600 | |
Less: Sales discounts | 2250 | |
Sales returns and allowances | 12000 | 14250 |
Net sales | 211350 | |
Cost of goods sold | 74500 | |
Gross profit | 136850 | |
Expenses | ||
Selling expenses | ||
Sales salaries expense | 32000 | |
Rent expense—Selling space | 8000 | |
Store supplies expense | 1500 | |
Advertising expense | 13000 | |
Total selling expenses | 545000 | |
General and administrative expenses | ||
Office salaries expense | 28500 | |
Rent expense—Office space | 3600 | |
Office supplies expense | 400 | |
Total general and administrative expenses | 32500 | |
Total expenses | 87000 | |
Net income | 49850 |
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Cost of goods sold | |
Merchandise inventory, beginning | 25400 |
Total cost of merchandise purchased | 90100 |
Merchandise available for sale | 115500 |
Merchandise inventory, ending | 41000 |
Cost of goods sold | 74500 |
Part 4: One-step income statement
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VALLEY COMPANY Income Statement For Year Ended August 31 | ||
Net sales | 211350 | |
Expenses | ||
Cost of goods sold | 74500 | |
Selling expenses | 54500 | |
General and administrative expenses. | 32500 | |
Total expenses | 161500 | |
Net income | $49850 |
Last words
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