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.

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