Chapter 17, Problem 16P

To determine

Future contract: When the two parties enter into the contract to purchase or sell the particular asset of specific quantity, specific date and predetermined price in future.

Unrealized holding gains and losses: An unrealized gain is a profit recorded on paper results from the investment. It occurs when shares prices increase after investor purchases it, but an individual has to sell it, till the time it is not sold the amount of increase in share price is recorded as an unrealized gain.

An unrealized loss is a loss recorded on paper results from the investment. It occurs when shares prices decrease after investor purchases it, but an individual has to sell it, till the time it is not sold the amount of decrease in share price is recorded as an unrealized loss.

(a) To determine: To determine the journal entry for inception of the futures contract, no premium paid.

Given information: All the information related to L Co. is provided in the question document.

To determine

(b) To determine: To determine the journal entry.

Given information: All the information related to L Co. is provided in the question document.

To determine

(c) To determine: To determine the journal entry.

Given information: All the information related to L Co. is provided in the question document.

To determine

(d) To determine: To determine the journal entry for the transactions.

Given information: All the information related to L Co. is provided in the question document.

To determine

(e) To determine: To determine the journal entry for sale of jewellery containing gold purchased.

All the information related to L Co. is provided in the question document.

To determine

(f) To determine: To determine the amount reported on the balance sheet and income statement.

To determine

(g) To determine: To determine the amount reported in the income statement related to futures contract and inventory.

Given information: All the information related to L Co. is provided in the question document.