What is the major difference between a periodic and perpetual inventory system? a. under the periodic inventory system, the purchase of inventory will be debited to the purchases account. b. under the periodic inventory system, no journal entry is recorded at the time of the sale of inventory for the cost of the inventory. c. under the periodic inventory system, all adjustments such as purchases returns and allowances and discounts are reconciled at the end of the accounting period. d. all of the answers are correct.

Variable rate cd’s = $90 treasury bills = $150 discount loans = $20 treasury notes = $100 fixed rate cds = $160 money market deposit accts. = $140 savings deposits = $90 fed funds borrowing = $40 variable rate mortgage loans $140 demand deposits = $40 primary reserves = $50 fixed rate loans = $210 fed funds lending = $50 equity capital = $120 a. develop a balance sheet from the above data. be sure to divide your balance sheet into rate-sensitive assets and liabilities as we did in class and in the examples. b. perform a standard gap analysis and a duration analysis using the above data if you have a 1.15% decrease in interest rates and an average duration of assets of 5.4 years and an average duration of liabilities of 3.8 years. c. indicate if this bank will remain solvent after the valuation changes. if so, indicate the new level of equity capital after the valuation changes. if not, indicate the amount of the shortage in equity capital.