8, please read the qestion and answer b Swifty Corp., a public company using IFRS, signed a long-term non-cancellable purchase commitment with a major supplier topurchase raw materials at an annual cost of $1,700,000. At December 31, 2022, the raw materials to be purchased in 2023 have amarket price of $1,462,000.(a)Your answer is correct.Prepare any December 31, 2022 entry that is needed. (Credit account titles are automatically indented when the amount is entered. Donot indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. List debit entry beforecredit entry.)Date Account Titles and ExplanationDec. 31,2022Loss on Purchase ContractsLiability for Onerous ContractsDebit238000Credit238000 (b)In 2023, Swifty receives the raw materials and pays the required $1,700,000. The raw materials now have a market value of$1,412,000. Prepare the entry to record the purchase. (Credit account titles are automatically indented when the amount isentered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. List all debitentries before credit entries.)DateDec. 31,2023Account Titles and ExplanationDebitCreditI

Answer : a) Journal entry on December 31,2022 : Date Account title Dr. Cr. Dec.31,2022…

Answered: annual cost of $1,700,000. At December…

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Accounting

annual cost of $1,700,000. At December 31, 2022, the raw mate

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter7: Inventories: Cost Measurement And Flow Assumptions

Section: Chapter Questions

Problem 3MC: During 2019, R Corp., a manufacturer of chocolate candies, contracted to purchase 100,000 pounds of...

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Concept explainers

Contract Costing

Contract costing is about tracing particular costs related to a particular contract entered into with the customer. It is one of the forms of job order costing. It is useful in long-term contracts at the most. It is seen that substantial time is required for the completion of the contract which takes different accounting periods. Thus, it is very much helpful for recognizing the costs associated with it and accounting in their specific accounting periods.

Question

8, please read the qestion and answer b

Swifty Corp., a public company using IFRS, signed a long-term non-cancellable purchase commitment with a major supplier to
purchase raw materials at an annual cost of $1,700,000. At December 31, 2022, the raw materials to be purchased in 2023 have a
market price of $1,462,000.
(a)
Your answer is correct.
Prepare any December 31, 2022 entry that is needed. (Credit account titles are automatically indented when the amount is entered. Do
not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. List debit entry before
credit entry.)
Date Account Titles and Explanation
Dec. 31,
2022
Loss on Purchase Contracts
Liability for Onerous Contracts
Debit
238000
Credit
238000

(b)
In 2023, Swifty receives the raw materials and pays the required $1,700,000. The raw materials now have a market value of
$1,412,000. Prepare the entry to record the purchase. (Credit account titles are automatically indented when the amount is
entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. List all debit
entries before credit entries.)
Date
Dec. 31,
2023
Account Titles and Explanation
Debit
Credit
I

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