During 2005, Sonic entered in a non-cancellable commitment to purchase 320,000 units of inventory at fixed price of P5 per unit, delivery to be made in 2006. On December 31, 2005, the purchase price of this inventory item had fallen to P4.40 per unit. The good covered by the purchase contract were delivered on January 28, 2006. What is the estimated liability on purchase equipment?

During 2005, Sonic entered in a non-cancellable commitment to purchase 320,000 units of inventory at fixed price of P5 per unit, delivery to be made in 2006. On December 31, 2005, the purchase price of this inventory item had fallen to P4.40 per unit. The good covered by the purchase contract were delivered on January 28, 2006. What is the estimated liability on purchase equipment?

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 5RE: Dani Corporation signed a binding commitment on December 2 to purchase inventory for 300,000 cash on...

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