The following data were extracted from the accounting records of Harkins company for the year ended April 30,2014:
merchandise inventory, may 1,2013 380,000
merchandise incentory, april 30,2014 415,000
purchases 3,800,000
purchases returns and allowances 150,000
purchases discounts 80,000
sales 5,850,000
freight in 16,600
a) Prepare the cost of merchandise sold section of the year ended April 30,2014, using the periodic inventory system.
b) Determine the gross profit to be reported on the income statement for the year ended April 30,2014.
c) Would gross profit be different if the perpetual inventory system was used instead of the periodic inventory system?