Question: The Mountain Mebel Store uses a periodic inventory system. Every January 1, Mebel and her husband close the store and take a complete physical inventory.

The Mountain Mebel Store uses a periodic inventory system. Every January 1, Mebel and her husband close the store and take a complete physical inventory. Last year, the inventory amounted to RS. 5,200; this year it totaled Rs. 3,800. during the current year, business recorded sales of Rs. 125,000 and purchases of Rs. 62,000.

a. Compute the cost of goods sold for current year

b. Explain why a small business such as this might use the periodic inventory system.

c. Explain some of the disadvantages of the periodic system to a larger business.

EXPLAIN MINIMUM 2000 WORDS

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