Howard, Inc. is a merchandising company that began operations on January 1, 2019. During January, the following inventory transactions occurred:

January Transactions:
Jan.	11	Howard purchased merchandise on account for $12,000.
	15	Howard returned some of the merchandise purchased on Jan. 11, and the supplier credited Howards account. The cost of the merchandise returned was $700.
	20	Howard sold merchandise that cost $3,500 for $5,000 in cash.

Required:

1.	Assume that Howard uses a perpetual inventory system. Prepare the journal entries to record the January inventory transactions.
2.	Assume that Howard uses a periodic inventory system. Prepare the journal entries to record the January inventory transactions. Be sure to include any adjusting entries necessary.
3.	Next Level Howards CEO states that a perpetual inventory system would result in a better inventory valuation. Evaluate this statement and provide a discussion of the benefits of each type of inventory system.