A company uses a perpetual system to record inventory transactions. The company purchases inventory on account on February 9, 2021, for $57,000 and then sells this inventory on account on March 7, 2021, for $79,000.Record the transactions for the purchase and sale of the inventory.

In a perpetual inventory system, transactions are recorded immediately when they occur. Here's how to record the purchase and sale of inventory in this system as per the given dates:

1. On February 9, 2021, the company purchases inventory worth $57,000 on account (meaning they'll pay the amount later). The accounting entry to record this transaction would be:

Debit Inventory $57,000 (to increase the asset Inventory) Credit Accounts Payable $57,000 (to increase the liability Accounts Payable)

This entry reflects that inventory has been added to the company’s assets, and a corresponding liability has been created because the inventory was purchased on account (on credit).

2. On March 7, 2021, the company sells the inventory that was purchased for $57,000 for $79,000 on account. The entries to record this sale transaction would include two parts - one to reflect the sale and another to record the cost of goods sold (COGS)

The first part of the sales entry reflects that there is an amount owed to the company by a customer (since the sale was made on account), and there has been an increase in the company's sales revenue. The second part reflects that inventory has been reduced because it has been sold, and the related cost for those goods is now recognized as an expense.