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Cost of Merchandise Sold The following schedule of cost of merchandise sold for the current year ended May 31, 20Y9 contains errors. Cost of merchandise sold: $348,750 Merchandise inventory, May 31, 20Y9 Purchases $1,968,750 $27,000 Plus: Purchases returns and allowances 18,000 45,000 Purchases discounts Gross purchases $2,013,750 Less freight in 33,750 1,980,000 Cost of merchandise purchased $2,328,750 Merchandise available for sale Less merchandise in June 1, 2 281,250 Cost of merchandise sold $2,047,500