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Using the following data taken from Payton Inc. which uses a periodic inventory system to answer this question.
| 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 |
Prepare the cost of merchandise sold section of the income statement for the year ended May 31.
| Payton Inc. |
| Partial Income Statement |
| For the Year Ended May 31 |
| Cost of merchandise sold: | | |
| | | $ |
| Cost of merchandise purchased: | | |
| | $ | |
| | | |
| | | |
| Net purchases | $ | |
| | | |
| Total cost of merchandise purchased | | |
| | | $ |
| | | |
| Cost of merchandise sold | | $ |
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