Merchandising Income Statement : Missing Data , Multiple Years E 12. Determine the missing data for each letter in the following three income statements for Sampson Paper Company ( in thousands ) : 1. What distinguishes a merchandising business from a service business ? 2. Can a business earn a gross profit but incur a net loss ? Explain . 3. In computing the cost of merchandise sold , does each of the following items increase or decrease that cost ? ( a ) freight , ( b ) beginning merchandise inventory , ( c ) purchase discounts , ( d ) ending merchandise inventory 4. Describe how the periodic system differs from the perpetual system of accounting for