pucal amoupled to $240,000. During the first week in January 2001, the company made only one per Best Business Products (BBP) sells business machines. At December 31, 2000, BBP's inventory PROE whese and one sale. These transactions were as follows: A'CO Jan. 2 Purchased 10 copiers and 20 fax machines from Sharp. The total cost of these machines LO was $90,000, terms 3/10, 160. Jan 6 Sold five different types of machines on account to Pace Corporation. The total sales price was $60,000. terms S/10, 1/90. The total cost of these five machines to BBP was. $37.200. a gross sales price and purchases at net cost and maintains subsidiary ledgers for accounts receiv- able, inventory, and accounts payable. Instructions ventory system. Briefly describe the operating cycle of a merchandising company. Identify the assets and lia- bilities directly affected by this cycle. du Prepare journal entries to record these transactions, assuming that BBP uses a perpetual in- c Explain the information in part b that should be posted to subsidiary ledger accounts. d. Compute the balance in the Inventory controlling account at the close of business on January 6. c. Prepare joumal entries to record the two transactions, assuming that BBP uses a periodic in- ventory system. 1. Compute the cost of goods sold for the first week of January assuming use of the periodic sys- tem. (Use your answer to part d as the ending inventory.) 8. Which type of inventory system do you think BBP most likely would use? Explain your rea- soning. de Compute the gross profit margin on the January 6 sales transaction