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 Purchases Purchases Returns and Allowances Purchases Discounts Freight-In Merchandise Inventory, December 31, 20 37,000 106,000 5,800 3,230 700 31,000 Multiple-Step Income Statement December 31, 20 Cost of goods sold: Cost of goods sold