Consider the following transactions that occurred in January 2012 for 5th Grader, Inc.
Jan 1 Purchased $5,000 of inventory from M&P, terms 1/10, n/20.
3 Sold $1,000 of goods to Display Town, Inc., terms 2/10, n/eom *(Cost $700).
5 Display Town, Inc., returned $300 of goods (Cost $183).
11 Paid M&P.
13 Received payment from Display Town, Inc.
Requirements
1. What type of inventory system is 5th Grader using—periodic or perpetual?
2. Which transaction date helped you decide?
3. Journalize January transactions for 5th Grader, Inc. No explanations are required.