Question

profitable and why? OJOU 20 01 pIy auN J0 STmaamA 133dva.no on inapiON LO6-3, LO6-5 Sky Probe sells state-of-the-art telescopes to individuals and organizations interested in studying the solar system. At December 31 last year, the company's inventory amounted to $250,000. Dur- ing the first week of January this year, the company made only one purchase and one sale. These transactions were as follows. EXERCISE 6.12 Comparison of Inventory Systems Jan. 2 Sold one telescope costing $90,000 to Central State University for cash, $117,000. Purchased merchandise on account from Lunar Optics, $50,000. Terms, net 30 days. Jan. 5 Prepare journal entries to record these transactions assuming that Sky Probe uses the perpetual inventory system. Use separate entries to record the sales revenue and the cost of goods sold for the sale on January 2. a. Compute the balance of the Inventory account on January 7. b.

Please show me how this is done..
thank you!!

Answer 1

PART-1)

Particulars	Debit	Credit
Cash	117,000
Sales		117,000
Cost of Goods Sold	90,000
Inventory		90,000
Inventory	50,000
Accounts Payable		50,000

　

Part-2)

Inventory at Dec. 31	250,000
Minus: Cost of Goods Sold	-90,000
Plus: Cost of Merchandise Purchased	50,000
Inventory at Jan. 7	210,000

　

Part-3)

Particulars	Debit	Credit
Cash	117,000
Sales		117,000
Purchases	50,000
Accounts Payable		50,000

　

Part-4)

Inventory, Jan. 1	250,000
Purchases	50,000
Cost of Goods Available for Sale	300,000
Inventory, Jan. 7	-210,000
Cost of Goods Sold	90,000