Several transactions from Gallino Corp. are listed.
• Gallino Corp. purchased inventory from Wilen, Inc. on account.
• Gallino paid shipping for the merchandise to be shipped from Wilen, Inc. to Gallino.
• Gallino Corp. returned one defective item of inventory to Wilen, Inc.
• Gallino Corp. purchased inventory from Anderson Wholesalers on account.
• Gallino Corp. sold merchandise to Renauld Adams on account.
• Gallino paid shipping for the merchandise to be shipped from Gallino to Adams.
• Gallino Corp. paid Wilen, Inc. for the inventory purchase in time to earn a discount.
• Gallino Corp. paid Anderson Wholesalers, but did not receive a discount.
• Adams returned merchandise to Gallino Corp.
• Adams paid for the balance of the merchandise he purchased within the discount period.
Required:
(a) Assuming a perpetual inventory system, indicate for each transaction whether the Inventory account is increased or decreased.
(b) Would your answers to part (a) change if Gallino Corp. used a periodic inventory system? If so, how and why? If not, why not?