Cost of Merchandise Sold and Related Items

The following data were extracted from the accounting records of Harkins Company for the year ended April 30, 2019:

Increase in estimated returns inventory	$ 11,200
Merchandise inventory, May 1, 2018	449,800
Merchandise inventory, April 30, 2019	562,300
Purchases	3,655,000
Purchases returns and allowances	112,500
Purchases discounts	67,500
Sales	5,623,000
Freight in	16,900

a. Prepare the cost of merchandise sold section of the income statement for the year ended April 30, 2019, using the periodic inventory system.

Harkins Company
Income Statement
For the Year Ended April 30, 2019
Cost of merchandise sold:
Merchandise inventory, May 1, 2018
Cost of merchandise purchased:
Net purchases
Cost of merchandise sold

b. Determine the gross profit to be reported on the income statement for the year ended April 30, 2019. $

c. Would gross profit be different if the perpetual inventory system was used instead of the periodic inventory system?