LUNAR-TRACK sells satellite tracking systems for receiving television broadcasts from communications satellites in space. At December 31, 2019, the company's inventory amounted to $22,000. During the first week in January 2020, LUNAR-TRACK made only one purchase and one sale. These transactions were as follows: Jan-3 Sold a tracking system to Mystery Mountain Resort for $10,000 cash. The system consisted of seven different devices, which had a total cost to LUNAR-TRACK of $5,600. Jan-7 Purchased two Model 200 and four Model 400 satellite dishes from Yamaha Corp. The total cost of this purchase amounted to $5,000; terms 3/5, n/15. LUNAR-TRACK records purchases of merchandise at net cost. The company has full-time accounting personnel and uses a manual accounting system. Instructions a) Briefly describe the operating cycle of a merchandising company. b) Prepare journal entries to record these transactions, assuming that LUNAR-TRACK uses a perpetual inventory system c) Prepare journal entries to record the two transactions, assuming that LUNAR-TRACK uses a periodic inventory system. d) Which type of inventory system do you think LUNAR-TRACK should use? Explain your reasoning. e) Determine the gross profit margin on the January 3 sales transaction.