Question

A company uses a perpetual system to record inventory transactions. The company purchases inventory on account on February 9, 2018, for $54,000 and then sells this inventory on account on March 7, 2018, for $74,000. Record the transactions for the purchase and sale of the inventory.

Answer 1

Answer:

The transaction recorded are shown in the below table.

Explanation:

According to the scenario, the following transaction according to the perpetual system can be recorded as follows :

Date                        Particulars                    Debit                    Credit

Feb.9                   Purchase Inventory              $54,000

                            Accounts payable                                            $54,000

Mar.7                   Accounts Receivable            $74,000

                            Sales inventory                                                    $74,000

Mar.7                    Cost of goods sold                    $54,000

                            Inventory                                                              $54,000