Materials were purchased on January 1, 2014, for $120,000 and this amount was entered in the Materials account.  On December...

Materials were purchased on January 1, 2014, for $120,000 and this amount was entered in the Materials account.  On December 31,2014, the materials would have cost $141,000, so the following entry is made. 

Inventory                            21,000

Gain on Inventories                        21,000