Cost of Goods Sold Section, Multiple-Step Income Statement Based on the information that follows, prepare the cost of goods sold section of a multiple-step income statement. Merchandise Inventory, January 1, 20-- $39,000 Estimated Returns Inventory, January 1, 20-- 1,000 Purchases 102,000 Purchases Returns and Allowances 4,200 Purchases Discounts 2,040 Freight-In 800 Merchandise Inventory, December 31, 20-- 30,500 Estimated Returns Inventory, December 31, 20-- 3,500