Problem:
The following data are for Montgomery Retail Outlet Stores. The account balances (in thousands) are for 2011.
Marketing and advertising costs $ 24,000
Merchandise inventory, January 1, 2011 45,000
Shipping of merchandise to customers 2,000
Building depreciation $ 4,200
Purchases 260,000
General and administrative costs 32,000
Merchandise inventory, December 31, 2011 52,000
Merchandise freight-in 10,000
Purchase returns and allowances 11,000
Purchase discounts 9,000
Revenues 320,000
Required
1. Compute (a) the cost of goods purchased and (b) the cost of goods sold.
2. Prepare the income statement for 2011.