Merchandise inventory, June 1 $393,250 Merchandise inventory, May 31 380,100 Purchases 1,579,600 Purchases returns and allowances 81,200 Purchases discounts 16,500 Sales 2,060,000 Freight in 59,250 Required: Using the above data taken from Payton Inc. which uses a periodic inventory system, deter determine the gross profit to be reported on the income statement for the year ended May 31.