Response to the following 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.