The following supplementary records summarize Tosca Company’s merchandising activities for year 2008. Set up T-accounts for Merchandise Inventory and Cost of Goods Sold. Then record the summarized activities in those T-accounts and compute account balances.

Cost of merchandise sold to customers in sales transactions . . . . . . . . . . . . . . . $196,000 Merchandise inventory, December 31, 2007 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25,000 Invoice cost of merchandise purchases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 192,500 Shrinkage determined on December 31, 2008 . . . . . . . . . . . . . . . . . . . . . . . . . . 800 Cost of transportation-in . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,900 Cost of merchandise returned by customers and restored to inventory . . . . . . . 2,100 Purchase discounts received . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,700 Purchase returns and allowances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,000