Howard, Inc. is a merchandising company that began operations on January 1, 2019. During January, the following inventory transactions occurred: January Transactions: Jan. 11 15 Howard purchased merchandise on account for $12,000. Howard retumed some of the merchandise purchased on Jan. 11, and the supplier credited Howard's account. The cost of the merchandise returned was $700. Howard sold merchandise that cost $3,500 for $5,000 in cash. 20 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 Howard's 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 Chart of Accounts CHART OF ACCOUNTS Howard, Inc. General Ledger ASSETS REVENUE 111 Cash 411 Sales Revenue 121 Accounts Receivable 141 Inventory 142 Allowance for Inventory Valuation 152 Prepaid Insurance 181 Equipment 198 Accumulated Depreciation v LIABILITIES 211 Accounts Payable 231 Salaries Payable EXPENSES 500 Cost of Goods Sold 510 Purchases 511 Purchase Returns and Allowances 512 Purchase Discounts Taken 513 Purchase Discounts Lost 514 Loss on Purchase Commitment 516 Recovery of Accrued Loss on Purchase Commitment 521 Insurance Expense 522 Utilities Expense 523 Salaries Expense 524 Bad Debt Expense 540 Interest Expense 541 Depreciation Expense 559 Miscellaneous Expenses 241 Accrued Loss on Purchase Commitment 251 Unearned Revenue EQUITY 311 Common Stock 331 Retained Earnings