Johns Specialty Store uses a periodic inventory system. The following are some inventory transactions for the month of May: John's purchased merchandise on account for $6,800. Freight charges of $1,200 were paid in cash. Johns returned some of the merchandise purchased in (1). The cost of the merchandise was $1,500 and Johns account was credited by the supplier. Merchandise costing $3,700 was sold for $7,000 in cash.