Problem 5-4A Computing merchandising amounts and formatting income statements LO C2, P4
[The following information applies to the questions displayed below.]
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.
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
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
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
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
Prepare a single-step income statement that includes these expense categories: cost of goods
sold, selling expenses, and general and administrative expenses.
Valley Company’s adjusted trial balance on August 31, 2013, its fiscal year-end, follows.
Solution
1)Net sales : sales Revenue 239,400
less:sales discount (2663)
sales return and allowance (15800)
net sales 219,937
2)cost of merchandise purchased = Invoice cost of merchandise + freight in -disocunt -
allowances
= 102900+3900-2161-4939
= $ 99,700

3)
4)Sales239,400less:Discount(2663)allowances and returns(15800)net sales
revenue219,937less:Cost of goods sold(92,945 )gross margin126,992less:Operatin
expenseselling :Sales salaries 32,798Rent selling 11,252 Advertising
20,349(64,399)General andStore supplies 2,873Office salary 29,925
Rent 2873office supplies 958(36,629)Total operating expenseNet
Income25,964