Identify the errors in the following schedule of cost of merchandise sold for the current year ended July 31,2010:

Cost of merchandise sold: Merchandise inventory, July 31, 2010 Purchases Plus: Purchases returns and allowances Purchases discounts Gross purchases Less freight in Cost of merchandise purchased Merchandise available for sale Less merchandise inventory, August 1, 2009 Cost of merchandise sold $ 140,000 $975,000 $12,000 8,000 20,000 $995,000 981,500 $1,121,500 125,000 $ 996,500