E 2-10 - Accounting for purchase commitments On Nov. 15, 2020, Malone Corp. entered into a commitment to purchase 200,000 units of raw material X for P40 per unit to be delivered on Mar. 15, 2021. The contract cannot be cancelled. Malone entered into this purchase commitment to protect itself against the volatility in the price of raw material X. purchase price of material X had fallen to P35 per unit. Вy Dec. 31, 2020, thе Required: Using periodic inventory system, prepare the journal entry on: 1. Nov. 15, 2020 2. Dec. 31, 2020 3. Mar. 15, 2021 if the price of the material had fallen further to P32 per unit 4. Mar. 15, 2021 if the price of the material had risen to P42 per unit
E 2-10 - Accounting for purchase commitments On Nov. 15, 2020, Malone Corp. entered into a commitment to purchase 200,000 units of raw material X for P40 per unit to be delivered on Mar. 15, 2021. The contract cannot be cancelled. Malone entered into this purchase commitment to protect itself against the volatility in the price of raw material X. purchase price of material X had fallen to P35 per unit. Вy Dec. 31, 2020, thе Required: Using periodic inventory system, prepare the journal entry on: 1. Nov. 15, 2020 2. Dec. 31, 2020 3. Mar. 15, 2021 if the price of the material had fallen further to P32 per unit 4. Mar. 15, 2021 if the price of the material had risen to P42 per unit
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 8E
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