The following were selected from among the transactions completed by Essex Company during July of the current year: July 5 Purchased merchandise on account from Kester Ltd for $33,450, under the terms of 2/10, n/30, FOB shipping point, invoice dated July 5. 6 Sold merchandise on account to Parsley Ltd for $36,000, under the terms of 1/15, n/45, FOB destination, invoice dated July 6. The cost of the merchandise sold was $25,000. 7 Paid $1,000 cash for shipping charges on the purchase of July 5. 8 Paid $1,200 cash for shipping charges related to the sale to Parsley Ltd on July 6. 10 Returned $6,850 of merchandise purchased on July 5 from Kester Ltd. 15 Paid Kester Ltd on account for purchase of July 5, less return of July 7. 20 Received cash on account from sale of July 6 to Parsley Ltd. 21 Purchased merchandise on account from Delta Ltd for $91,200, under the terms of 2/10, n/30, FOB destination, invoiced dated July 30. 22 Upon the request of Delta Ltd, Essex Company paid $1,500 for shipping charges on the purchases on July 21, reducing the amount owned to Delta Ltd. 25 Paid Parsley Ltd a cash refund of $7,150 for returned merchandise from sale of July 6. The returned merchandise is not defective, and its cost was $4,250. 27 After negotiations with Delta Ltd regarding problems with the purchases on July 21, Essex Company received a price reduction from Delta Ltd of $5,000 off the $91,200 of merchandise purchased. Required: (Explanation is NOT required) Prepare journal entries for the above merchandising transactions of Essex Company, assuming it uses a perpetual inventory system and the gross method. Part B (6 marks) a) Identify and explain the components of income for a merchandising company. b) Discuss the differences between the periodic and perpetual inventory systems