Final answer:
To journalize purchase transactions, debit Inventory and credit Accounts Payable or Cash. Inventory cost includes all costs to acquire and prepare inventory for sale. A firm's accounting profit is calculated by subtracting all expenses from sales revenue, which was $50,000 for the given firm.
Step-by-step explanation:
Understanding Purchase Transactions and Inventory Cost
To journalize the purchase transactions in accounting, one would typically debit the Inventory account and credit the Accounts Payable or Cash account, depending on whether the purchase was on credit or for cash. However, the initial question about the specific transactions to be journalized does not provide sufficient details for a complete answer.
Concerning the cost of inventory, it is calculated by adding together all costs that are directly attributable to acquiring the inventory, including purchase price, import duties, shipping, handling, and any other costs that are directly attributable to bringing the inventory to its current location and condition. If we receive detailed transactions, we could itemize and sum these costs to find the total inventory cost.
The accounting profit of a firm is determined by subtracting all the expenses from the sales revenue. Based on the information provided, the firm's accounting profit would be:
Sales Revenue - Labor Costs - Capital Costs - Material Costs = Accounting Profit
$1,000,000 - $600,000 - $150,000 - $200,000 = $50,000
The firm's accounting profit for last year was $50,000.