EXERCISE 6.13 The Periodic Inventory System L06-4, L06-5 Mountain Mabel's is a small general store located just outside of Yellowstone National Park. The store uses a periodic inventory system. Every January 1, Mabel and her husband close the store and take a complete physical inventory while watching the Rose Bowl Parade on television. The inventory balance on January 1 of the prior year was $6,240, and the inventory balance on December 31 was $4,560. Sales were $150,000 during the prior year, and purchases were $74,400. a. Compute the cost of goods sold for the prior year. b. Explain why a small business such as this might use the periodic inventory system, c. Explain some of the disadvantages of the periodic system to a larger business, such as a Lowe's store