Warren's Gift Shop uses a periodic Inventory system. At December 31, Year 1, the accounting EXERCISE 5.7 records include the following information: Periodic Inventory LO 4 Inventory (as of December 31, Year 1) $ 10,400 198,800 Purchases 105.000 Net sales A complete physical inventory taken at December 31, Year 2. indicates merchandise cost- ing 89,600 remains in stock. .. How were the amounts of beginning and ending inventory determined? b. Compute the amount of the cost of goods sold in Year 2. c. Prepare two closing entries at December 31. Year 2. that will have the effects of creating a Cost of Goods Sold account with the appropriate balance and bringing the Inventory account up-to-date. d. Prepare a partial income statement showing the shop's gross profit for the year. e Describe why a company such as Warren's Gift Shop would use a periodic inventory sys- tem rather than a perpetual inventory system. SVERRIRE