Part A 1. In a perpetual inventory system, two entries usually are made to record each sales transaction. The purposes of these entries are best described as follows: A. One entry recognizes the sales revenue, and the other recognizes the cost of goo sold. B. One entry records the purchase of the goods, and the other records the sale. C. One entry records the cost of goods sold, and the other reduces the balance in the Inventory account. D. One entry updates the general ledger, and the other updates the subsidiary ledgers. 2. In a periodic inventory system, the cost of goods sold is: A. Recorded as sales transactions occur. B.Determined by computation at year-end, after the taking of a complete physic inventory. C.Equal to the beginning inventory, plus purchases made during the period, less sales revenue for the period. D. Determined by subtracting the balance in the Gross Profit account from the amount of net sales. 3. Parkside Pool reports net sales of $625,000, gross profit of $275,000, and profit for the period of $15,000. The company's cost of goods sold is: A. $335,000. B. $350,000. C. $340,000. D. $325,000. 4. During the year 2018, the inventory of Debra's Gift Shop was decreased by $50,000. If the income statement for the year 201X reported cost of goods sold of $350,000, purchases during the year must have amounted to: A. $400,000. B. $310,000. C. $300,000. D. $350,000. 5. Which of the following businesses is most likely to use a periodic inventory system? A. A jewelry shop. B. A small boutique. C. A supermarket chain. D. A car dealership. Part B Part I Banana Shop uses a periodic inventory system. As at 31 December 20X2, the accounting records include the following information: Inventory (as at 31 December 20X1) Net Sales Purchases $14,000 $398,000 $151,000 A complete physical inventory taken as at 31 December 20X2 indicates goods costing $15,000 remains in stock. Required: (a) Compute the amount of the cost of goods sold in 20X2. (b) Prepare TWO closing entries as at 31 December 20X2: the first to create a Cost of Goods Sold account with the appropriate balance and the second to bring the Inventory account up-to-date. (c) Journal Accounts Titles Date Debit $ Credit $