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The following data were extracted from the accounting records of Dana Designs for the year ended March 31.

Merchandise inventory, April 1	$530,000
Merchandise inventory, March 31	375,000
Purchases	270,000
Purchases returns and allowances	25,000
Purchases discounts	10,000
Sales	770,000
Freight in	3,000
	Required:
	Prepare the cost of merchandise sold section of the income statement for the year ended March 31, using the periodic method. Refer to the lists of Labels and Amount Descriptions for the exact wording of the answer choices for text entries. You will not need to enter colons (:), it will automatically appear if it is required. Be sure to complete the statement heading. If an amount is a negative number use a minus sign to indicate.

Labels
For the Year Ended March 31
Cost of merchandise sold
Amount Descriptions
Cost of merchandise purchased
Freight in
Gross profit
Merchandise available for sale
Merchandise inventory, April 1
Merchandise inventory, March 31
Net purchases
Purchases
Purchase discounts
Purchase returns and allowances
Sales
Total cost of merchandise purchased

Prepare the cost of merchandise sold section of the income statement for the year ended March 31, using the periodic method. Refer to the lists of Labels and Amount Descriptions for the exact wording of the answer choices for text entries. You will not need to enter colons (:), it will automatically appear if it is required. Be sure to complete the statement heading. If an amount is a negative number use a minus sign to indicate.

Dana Designs

Income Statement

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