Record your response in the general ledger

1. Gordon's inventory includes some Routers that are old technology. The 500 routers in stock were purchased for $30 each. Those routers could be purchased now for $17 each. Gordon does not want to recommend the use of old routers to clients. The company has an opportunity to sell the routers to an overstock company for $10 each. Costs to package and ship the routers to the overstock company will be $75.

2. Research efforts during the year resulted in a patent for a new type of switch used in telecommunication systems. The total costs to develop the new switch were $37,000. The cost to file for the patent was $3,000. The switch will probably produce revenue for 6 years because it will probably be replaced with new technology at that time. All $40,000 of the costs associated with the new switch were recorded as Operating Expenses.

	Debit	Credit
Cash	34,240
Accounts Receivable	67,600
Allowance for Doubtful Accounts		300
Inventory	28,500
Equity Securities (at Fair Value)	17,274
FV Adjustment - Equity Securities	1,300
Investment in Ramsey Corporation	70,000
Equipment	78,126
Accum Deprec-Equip		19,200
Building	246,700
Accum Deprec - Building		47,000
Land	50,000
Right of Use Asset	89,302
Accounts Payable		57,500
Lease Liability		69,302
Bank Loan		25,935
Common Stock ($6.50 par)		65,000
Paid in Capital - Common Stock		86,400
Retained Earnings		138,080
Treasury Stock (100 shares)	2,200
Sales		441,385
Design and Installation Revenue		259,000
Cost of Goods Sold	192,400
Operating Expenses	244,000
Depreciation Expense	2,900
Interest Expense	14,700
Income Tax Expense	69,860
TOTAL	1,209,102	1,209,102

Answer rating: 100% (QA)

1 Gordons inventory DebitCredit Inventory15000 Cash15000 In this transaction Gordons inventory is de... View the full answer