10. Given the following information, prepare in good form the cost of goods sold section of an income statement for 20x5.

Freight-In	$ 4,000
Merchandise Inventory, December 31, 20x4	15,000
Merchandise Inventory, December 31, 20x5	16,000
Purchases	38,000
Purchases Returns and Allowances	1,800

ANS:

Merchandise Inventory, December 31, 20x4		$
Purchases	$
Less Purchases Returns and Allowances
Net purchases	$
Freight-in
Net cost of purchases
Cost of goods available for sale		$
Less Merchandise Inventory, December 31, 20x5
Cost of Goods Sold			$