Transonic flow around the two dimensional inlet of a jet engine has been calculated by using finite difference method. Among the many full potential equation solvers, the approximate factorization scheme proposed by Holst and Ballhaus has been particularly chosen and tested for practical applications. Methods of generating appropriate grid system has been also studied and good clustering functions were introduced. Double C-type grid system was employed because it offered advantage in calculating flow around the lips of an inlet. Boundary conditions involved with the inlet problems were also studied. Pressures and Mach number contours for a few selections of operating conditions were presented. This two-dimensional transonic inviscid program was particularly designed to fit for the viscid-inviscid interaction, with the aid of turbulent boundary layer code developed separately.