Financial & Managerial Accounting 17th Edition by Jan Williams ,Susan Haka,Mark Bettner,Joseph Carcello

تمرين 50

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. During the first week of January this year, the company made only one purchase and one sale. These transactions were as follows:
a. 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 or, January 2.
b. Compute the balance of the Inventory account on January 7.
c. Prepare journal entries to record the two transactions, assuming that Sky Probe uses the periodic inventory system.
d. Compute the cost of goods sold for the first week of January assuming use of a periodic inventor)' system. Use your answer to part b as the ending inventory.
e. Which inventory system do you believe that a company such as Sky Probe would probably use? Explain your reasoning.