Question

Valley Company Adjusted Trial Balance As of August 31, 2020 Account Debits Credits $ 41,000 130,400 $ 25,000 10,000 94.550 8,000 225,600 Merchandise inventory -ending Other (noninventory) assets Total liabilities Common stock Retained earnings 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 2,250 12,000 74,500 32,000 8,000 1,500 13,000 28,500 3,600 400 !! ) Totals $ 355,150 $ 355,150 $ 25,400 Beginning merchandise inventory Additional information from the month: Invoice cost of merchandise purchases Purchases discounts received Purchases returns and allowances Costs of transportation in 92,000 2,000 4,500 4,600 The problem has five parts: Part 1: Compute the company's net sales for the year. Part 2: Compute the company's total cost of merchandise purchased for the year

Answer 1

Net Sales
Sales	225600
Less: Sales Discount	2250
Less: Returns and allowances	12000
Net Sales	211350

Total Cost of Merchandise Purchased
Invoice Cost of Purchase	92000
Less: Discount Received	-2000
Less: Returns and allowances	-4500
Add: Freight In	4600
	90100

Note: Total cost of merchandise purchased is required, therefore Begining inventory and closing inventory is not to be considered in calculation.