For each situation given, calculate cost of goods sold and identify whether the information provided reflects a perpetual or periodic inventory system.

a. Merchandise Inventory shows a balance at January 1, 2023, of $170, the Purchases account has a balance of $700 at December 31, 2023, and a physical count of merchandise inventory on the same date reveals a balance of $120 on hand.

b. Merchandise Inventory shows a $200 balance at January 1, 2023, purchases during the period of $1,000, and a balance of $75 at December 31, 2023, after the adjustment for shrinkage.