80.2K

Verified Solution

Link Copied!

Problem 5-4A Computing merchandising amounts and formatting income statements LO C2, P4

[The following information applies to the questions displayed below.]

Valley Companys adjusted trial balance on August 31, 2013, its fiscal year-end, follows.

			Debit			Credit
Merchandise inventory		$	35,000
Other (noninventory) assets			140,000
Total liabilities					$	40,425
K. Valley, Capital						116,611
K. Valley, Withdrawals			8,000
Sales						239,400
Sales discounts			3,663
Sales returns and allowances			15,800
Cost of goods sold			92,945
Sales salaries expense			32,798
Rent expenseSelling space			11,252
Store supplies expense			2,873
Advertising expense			20,349
Office salaries expense			29,925
Rent expenseOffice space			2,873
Office supplies expense			958
Totals		$	396,436		$	396,436

On August 31, 2012, merchandise inventory was $28,245. Supplementary records of merchandising activities for the year ended August 31, 2013, reveal the following itemized costs.

Invoice cost of merchandise purchases	$	102,900
Purchase discounts received		2,161
Purchase returns and allowances		4,939
Costs of transportation-in		3,900

References

Section BreakProblem 5-4A Computing merchandising amounts and formatting income statements LO C2, P4

2.

value: 0.80 points

Required information

Problem 5-4A Part 1

Required:
1.	Compute the companys net sales for the year.

References

eBook & Resources

WorksheetDifficulty: MediumLearning Objective: 05-P4 Define and prepare multiple-step and single-step income statements.

Problem 5-4A Part 1Learning Objective: 05-C2 Identify and explain the inventory asset and cost flows of a merchandising company.

Check my work

3.

value: 0.80 points

Required information

Problem 5-4A Part 2

2.	Compute the companys total cost of merchandise purchased for the year.

References

eBook & Resources

WorksheetDifficulty: MediumLearning Objective: 05-P4 Define and prepare multiple-step and single-step income statements.

Problem 5-4A Part 2Learning Objective: 05-C2 Identify and explain the inventory asset and cost flows of a merchandising company.

Check my work

4.

value: 0.80 points

Required information

Problem 5-4A Part 3

3.	Prepare a multiple-step income statement that includes separate categories for selling expenses and for general and administrative expenses.

rev: 01_02_2014_QC_43145

References

eBook & Resources

WorksheetDifficulty: MediumLearning Objective: 05-P4 Define and prepare multiple-step and single-step income statements.

Problem 5-4A Part 3Learning Objective: 05-C2 Identify and explain the inventory asset and cost flows of a merchandising company.

Check my work

5.

value: 0.80 points

Required information

Problem 5-4A Part 4

4.	Prepare a single-step income statement that includes these expense categories: cost of goods sold, selling expenses, and general and administrative expenses.

Answer & Explanation Solved by verified expert

See Answer