Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

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

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:

Jan.2 Sold one telescope costing $97,500 to Central State University for cash, $130,000.

Jan.5 Purchased merchandise on account from Lunar Optics, $64,000. Terms, net 30 days.

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. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

Compute the cost of goods sold for the first week of January assuming use of a periodic inventory system. Use your answer to part b as the ending inventory.

Which inventory system do you believe that a company such as Sky Probe would probably use?

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Handbook Of Energy Audits

Authors: Albert Thumann, William J. Younger

6th Edition

0824709985, 978-0824709983

More Books

Students also viewed these Accounting questions

Question

(192) Is preferred stock more like bonds or common stock? Explain.

Answered: 1 week ago

Question

=+17.14. 1 Extend the ideas in the preceding two problems to R *.

Answered: 1 week ago