Question: BizKid Company's adjusted trial balance on August 31, 2011, its fiscal year-end, follows.
On August 31, 2010, merchandise inventory was $25,000. Supplementary records of merchandising activities for the year ended August 31, 2011, reveal the following itemized costs.
Invoice cost of merchandise purchases . . . . . . . . $91,000
Purchase discounts received . . . . . . . . . . . . . . . . . 1,900
Purchase returns and allowances . . . . . . . . . . . . . 4,400
Costs of transportation-in . . . . . . . . . . . . . . . . . . 3,900
Required: 1. Compute the company's net sales for the year.
2. Compute the company's total cost of merchandise purchased for the year.
3. Prepare a multiple-step income statement that includes separate categories for selling expenses and for general and administrative expenses.
4. Prepare a single-step income statement that includes these expense categories: cost of goods sold, selling expenses, and general and administrative expenses.