Question No. 3 (10 marks) This question is comprised of two independent parts. Answer both parts PART A: (5 marks) Required: Below is a list of 10 statements describing a characteristic of the periodic and/or perpetual system. Some statements relate to only one system, some statements relate to both systems, and some statements relate to neither system. Enter an "x" in the columns below to indicate the appropriate system: (a statement may require one, two, or no "x's"). Each correctly answered statement is worth mark. There are no part marks given. Perpetual Inventory System Periodic Inventory System (a) When an item is sold, two concurrent accounting entries are made for different amounts. (b) Cost of goods sold is determined as a residual amount. (c) At the end of the accounting period, two inventory entries usually must be made in the accounts. (d) More effective inventory control (such as of theft) is possible (e) The balance in the inventory account throughout the accounting period usually is the beginning inventory amount. (1) Each purchase is debited to the inventory account throughout the accounting period. (8) Inventory amounts are determined by actual count. (h) Purchases of merchandise are not debited to the inventory account throughout the period. (i) Inventory amounts are determined from the detailed inventory records 6) Only one accounting entry is made when an item is sold. PART B: (5 marks) per Unit per Unit A specialized retailer sells four different types of products. The following is information relating to these products. #of Cost Selling Price Item Units A 80 S60 $50 B 130 S100 $180 80 S120 $60 D 60 $90 $120 The company estimates selling costs to be 4% of the selling price for sales commissions. Required: (Show all supporting calculations for part marks.) Calculate the amount by which the inventory should be written down if the LCNRV principle is applied on an item-by-item basis and the retailer uses the allowance method. (b) Based upon your answer above, prepare the corresponding journal entry to record the write down