The following summarizes Tesla’s merchandising activities for the year. Set up T-accounts for Merchandise Inventory and for Cost of Goods Sold. Enter each line item into one or both of the two T accounts and compute the T-account balances.

Cost of merchandise sold to customers ................................................................. $196,000
Merchandise inventory, beginning-of-year ................................................................. 25,000
Cost of merchandise purchases, gross amount ...................................................... 192,500
Shrinkage on merchandise as of year-end ..................................................................... 800
Cost of transportation-in for merchandise purchases ............................................... 2,900
Cost of merchandise returned by customers and restored to inventory ................ 2,100
Discounts received from suppliers on merchandise purchases .............................. 1,700
Returns to and allowances from suppliers on merchandise purchases ................. 4,000