The following data are for XYZ merchandising company. The account balances are for 2020.

Merchandise inventory (January 1) $133,500

Merchandise inventory (December 31) 122,700

Marketing & distribution costs 218,500

Store utilities 36,500

General administrative expenses 157,800

Purchases 455,000 Transportation in 67,500

Purchase discounts 26,500

Purchase returns and allowances 12,800

Sales revenue 950,000

Required:

a. Compute cost of goods purchased. (10 points)

b. Compute cost of goods sold (10 points)

c. Prepare an income statement for the year (20 points)