Question

30 Paid Arod C fiscal year-end, follows. Valley Company's adjusted trial balance on August 31, 2017, its fiscal year-e Debit Credit $ 41,000 130,400 Merchandise Inventory ... Other noninventory) assets.. Total abilities... Common stock.... Retained earnings .... $ 25,000 10,000 94.550 8,000 225,600 Dividends ..... 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....... Totals.............. 2,250 12,000 74,500 32,000 8,000 1,500 13,000 28,500 3,600 400 $355,150 $355,150 On August 31, 2016, merchandise inventory was $25,400. Supplementary records of merchandise activities for the year ended August 31, 2017, reveal the following itemized costs.

Answer 1

1.

Calculation of net sales for the year:

Sales Less: Sales discount Less: Sales returns and allowances Net sales 225600 -2250 - 12000 211350

2.

Calculation of merchandise purchased during the year:

Cost of merchandise purchased Invoice cost of merchandise purchased Less: Purchase discounts received Less: Purchase returns and allowances Add: Costs of transportation-in Total cost of merchandise purchased 92000 2000 4500 4600 90100

3.

Multi-step income statement:

в с 13 Valley company 14 Income statement 15 For year ended August 31, 2017 16 Sales 225600 17 Less: Sales discounts 2250 18 Less: Sales returns and allowances 12000 =B17+B18 19 Net sales =C16-C18 20 Cost of goods sold 74500 21 Gross profit =C19-C20 22 Expense: 23 Selling expense: 24 Sales salaries expense 32000 25 Rent expense-selling space 8000 26 store supplies expense 1500 27 Advertising expense 13000 28 Total selling expense =SUM(B24:B27) 29 General and administrative expenses 30 Office salaries expense 28500 31 Rent expense-office space 3600 32 Office supplies expense 400 33 Total general & administrative expense =SUM(B30:B32) 34 Total expense =C28+C33 35 Net income =C21-C34

Results of the excel sheet are as follows:

A C 225,600 14.250 211,350 74,500 136,850 B 13 Valley company 14 Income statement 15 For year ended August 31, 2017 16 Sales 17 Less: Sales discounts 2,250 18 Less: Sales returns and allowances 12,000 19 Net sales 20 Cost of goods sold 21 Gross profit 22 Expense: 23 Selling expense: 24 Sales salaries expense 32,000 25 Rent expense-selling space 8,000 26 store supplies expense 1,500 27 Advertising expense 13,000 28 Total selling expense 29 General and administrative expenses 30 Office salaries expense 28,500 31 Rent expense-office space 3,600 32 Office supplies expense 33 Total general & administrative expense 34 Total expense 35 Net income 54,500 400 32,500 87,000 49,850

4.

Single-step income statement:

А I B C 37 Valley company 38 Income statement 39 For year ended August 31, 2017 40 Net sales 211350 41 Expenses 42 Cost of goods sold 74500 43 Selling expenses 54500 44 General & administrative expenses 32500 45 Total expense =SUM(B42:B44) 46 Net income =C40-C45

Results of the excel sheet are as follows:

A B C 37 Valley company 38 Income statement For year ended August 31, 2017 40 Net sales 211,350 41 Expenses 42 Cost of goods sold 74,500 43 Selling expenses 54,500 44 General & administrative expenses 32,500 45 Total expense 161,500 46 Net income 49,850

Thus, net income is $49,850.