EXERCISE 4 (25 points) Warton Co. sells electric appliances. At December 31, 2021, Warton's inventory amounted to 300,000. During the first week of January 2022, the company made only one purchase and one sale. These transactions were as follows: Jan. 3 Purchased 85 machines from Siemens. The total cost of these machines was 70,000. Discount terms 3/10, n/30. Jan. 7 Sold 100 dishwashers on account to Home Bazar. The total sales price was 160,000. The total cost of these 100 units to Warton was 82,400. Credit terms 3/10, n/50. Warton has a full-time accountant and a computer-based accounting system. Warton adopts the following accounting procedures: The company records all its purchases at net cost. The company records all its sales at the gross sales price. 1. Prepare journal entries to record these transactions, assuming Warton uses a perpetual inventory system. (15 points) 2. Which type of inventory system do you think Warton most likely would use? Explain your reasoning. (5 points) 3. Explain the differences in the accounting procedures between perpetual and periodic inventory systems. (5 points)