1. A merchandising business has the following financial data for the month of January:

$15,000 Merchandise inventory balance on January 1

$50,000 Purchases

$3,000 Purchase discounts

$2,000 Purchase returns & allowances

$1,000 Incoming freight costs

$10,000 Merchandise inventory balance on January 31

$65,000 Sales revenue

$1,500 Sales returns and allowances

$5,000 Operating expenses

1. Determine cost of goods sold for January.

2. Determine gross margin (gross profit) for January.