Periodic Inventory System is a type of inventory system in which the business owner does not keep the perpetual records of inventory and instead takes inventory at fixed intervals like monthly, quarterly, or yearly. Bates uses Periodic Inventory System. Following transactions are: (a) Bates invested additional $70000 cash in the business. (b) Received $125,000 in advance from the state of Iowa for services which will be performed later. (c) Received merchandise (will be resold to customers) purchases on account for $19,000. The terms were 2/10: n/30, FOB origination and the invoice included a $100 freight charge. The Invoice is for $19,100. (d) Paid a six-month insurance premium of $1800. (e) Purchased a $45000 short-term certificate of deposit from Home Saving Bank. The CD is considered a short-term investment.Purchases refer to the process of acquiring goods or services by a company for use, resale, or further production. Purchases are recorded in the purchase account, which is an expense account, as the company buys things to carry out its business operations.Saving refers to income not spent or used to purchase goods or services and is preserved or invested to make profits in the future.Invoice refers to a bill or invoice sent by the seller of goods or services to the buyer. The invoice describes the purchase price of the goods or services rendered. An invoice typically lists the quantity of items sold, the prices of the items sold, and the total sum due for the transaction.