For each situation given, calculate cost of goods sold and identify if the information provided reflects a perpetual or periodic inventory system.
a. Merchandise Inventory shows a balance at January 1, 2014, of $170, the Purchases account has a balance of $700 at December 31, 2014, and a physical count of merchandise inventory on the same date reveals a balance of $120 on hand.
b. Merchandise Inventory shows a $200 balance at January 1, 2014, purchases during the period of $1,000, and a balance of $75 at December 31, 2014, after the adjustment for shrinkage.