The following data were extracted from the accounting records of Meridan designs for the year edned march 31, 2014

Merchandise inventory april 1 2013 $530,000

Merchandise inventory march 31 2014 375,000

purchases 270,000

purchases on returns and allowances 25,000

purchase discounts 10,000

sales 790,000

sales returns 20,000

freight in 3,000

Prepare the cost of merchandise sold section of the income statement for the year ended march 31,2014 using the periodic method. Also determine gross profit.