Analyze the following T-account in the ledger of Gibbs Company.

Merchandise Inventory
5,000	400

If $5,000 in the Inventory account represents merchandise purchased from a supplier, we can assume the company uses the

perpetual inventory method and $400 may represent cost of goods sold.perpetual inventory method and $400 may represent a purchase return.perpetual inventory method and $400 may represent a purchase allowance.All of these answer choices are correct.