Under the perpetual inventory system, when goods are sold, Cost of Goods Sold includes

a proportionate share of transportation$-$in costs but no adjustment for purchase returns and

allowances

a proportionate share of adjustments for purchase returns and allowances but no transporta$-$

tion in or out costs

a proportionate share of transportation$-$in and adjustments for purchase returns and al$-$

lowances

only the unadjusted, original cost of the merchandise