During 2016, Palazzo Company signed a non-cancelable contract with Crown Milling Company to purchase 1,000, 50- kilos sacks of rice at $2,700 per sack with delivery to be made in 2017. On December 31,2016, the price had fallen to $2,680 per sack. On April 1,2017, the price per sack of rice further decreased to $2,670. 1. Assuming that the price per 50 kilos sack of rice was $2,710 on April 1,2017, how much is the recovery of loss recognised on that date? 2. In Palazzo's December 31, 2016 profit and loss, how much is reported as loss on purchase commitments?Single line text. 3. What is the amount of loss on purchase commitments recognised upon delivery of the 1,000 sacks on April 1,2017?
During 2016, Palazzo Company signed a non-cancelable contract with Crown Milling Company to purchase 1,000, 50- kilos sacks of rice at $2,700 per sack with delivery to be made in 2017. On December 31,2016, the price had fallen to $2,680 per sack. On April 1,2017, the price per sack of rice further decreased to $2,670. 1. Assuming that the price per 50 kilos sack of rice was $2,710 on April 1,2017, how much is the recovery of loss recognised on that date? 2. In Palazzo's December 31, 2016 profit and loss, how much is reported as loss on purchase commitments?Single line text. 3. What is the amount of loss on purchase commitments recognised upon delivery of the 1,000 sacks on April 1,2017?
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...
Related questions
Question
During 2016, Palazzo Company signed a non-cancelable contract with Crown Milling Company to purchase 1,000, 50- kilos sacks of rice at $2,700 per sack with delivery to be made in 2017. On December 31,2016, the price had fallen to $2,680 per sack. On April 1,2017, the price per sack of rice further decreased to $2,670.
1. Assuming that the price per 50 kilos sack of rice was $2,710 on April 1,2017, how much is the recovery of loss recognised on that date?
2. In Palazzo's December 31, 2016
3. What is the amount of loss on purchase commitments recognised upon delivery of the 1,000 sacks on April 1,2017?
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 2 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:
9781337788281
Author:
James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:
Cengage Learning
EBK CONTEMPORARY FINANCIAL MANAGEMENT
Finance
ISBN:
9781337514835
Author:
MOYER
Publisher:
CENGAGE LEARNING - CONSIGNMENT
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:
9781337788281
Author:
James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:
Cengage Learning
EBK CONTEMPORARY FINANCIAL MANAGEMENT
Finance
ISBN:
9781337514835
Author:
MOYER
Publisher:
CENGAGE LEARNING - CONSIGNMENT
Principles of Accounting Volume 2
Accounting
ISBN:
9781947172609
Author:
OpenStax
Publisher:
OpenStax College