The Gardner Pharmacy uses the periodic inventory method. In its most recent fiscal year, 2010, Gardner had beginning inventory of $50,000; gross purchases of $167,000; freight-in of $4,000; purchases returned to suppliers totaling $8,000; and ending inventory of $77,500. Make the year-end adjusting and closing entries to reflect the above information in the inventory, cost of goods sold, and income summary accounts. Then, assuming sales of $325,000, other expenses (excluding taxes) of $95,000, and a tax rate of 30 percent, prepare an income statement for the year, including the derivation of the cost of goods sold amount.