1. During March 2021, Micheals Photo Assets had the following transactions, selling $13,000 in merchandise. At the end of February, its merchandise inventory was $20,000. During March, customers returned $500 of merchandise and the company purchased inventory totaling $15,000. Trying to plan for next month, Micheal conducted an inventory on March 31 and found that the inventory totaled $10,000. The companys operating expenses for the month were $6,000. The company uses the periodic inventory system and the accrual basis of accounting.

Which of the following statements is true?

1. Gross Profit is a negative $18,500 and Net Sales is $12,500
2. Gross Profit is negative $12,500 and Cost of Goods Sold is $25,000
3. Net Loss is $18,500 and Cost of Goods Available for Sale is $22,500
4. Beginning Inventory is $20,000 and Net Purchases is $25,000