What is the amount of net gain (loss) on purchase commitment to be reported in 2015 and 2016 Statement ofcomprehensive income, respectively?
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1. In September 15, 2015, MARK Company signed two non-cancellable purchase commitments. The first requires MARK to purchase inventory of 1,000 units at P950 each (total cost P950,000) by January 15, 2016. The second requires the company to purchase inventory of 1,000 units at P1,200 each (total cost P1,200,000) by March 15, 2016. MARK’s fiscal year end is December 31. The company uses perpetual inventory system.
Movements in the price of the inventory are summarized below:
December 31, 2015 - P1,100
January 15, 2016 - 900
March 15, 2016 - 1,300
Question: What is the amount of net gain (loss) on purchase commitment to be reported in 2015 and 2016 Statement ofcomprehensive income, respectively?
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