Financial accounting 16th Edition by Jan Williams,Susan Haka,Mark Bettner ,Joseph Carcello

Exercise 14

Mountain Mabel's is a small general store located just outside of Yellowstone National Park.he store uses a periodic inventory system.very January 1, Mabel and her husband close the store and take a complete physical inventory while watching the Rose Bowl Parade on televi­sion.he inventory balance on January 1 of the prior year was $6,240, and the inventory balance on December 31 was $4,560.ales were $150,000 during the prior year, and purchases were $74,400.
a.ompute the cost of goods sold for the prior year.
b.xplain why a small business such as this might use the periodic inventory system.
c.xplain some of the disadvantages of the periodic system to a larger business, such as a Sears store.