At December 31, 2025, Sarasota Company has outstanding noncancelable purchase commitments for 39,500 gallons, at $3.42 per gallon, of raw material to be used in its manufacturing process. The company prices its raw material inventory at cost or market, whichever is lower, and uses a perpetual inventory system. Give the entry in January 2026, when the 39,500-gallon shipment is received, assuming that the situation given in (b2) above existed at December 31, 2025, and that the market price in January 2026 was $3.08 per gallon. Prepare the journal entry for when the materials are received in January 2026. (List all debit entries before credit entries. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No entry" for the account titles and enter O for the amounts.) Date Jan. 2026 Account Titles and Explanation III Debit Credit

At December 31, 2025, Sarasota Company has outstanding noncancelable purchase commitments for 39,500 gallons, at $3.42 per gallon, of raw material to be used in its manufacturing process. The company prices its raw material inventory at cost or market, whichever is lower, and uses a perpetual inventory system. Give the entry in January 2026, when the 39,500-gallon shipment is received, assuming that the situation given in (b2) above existed at December 31, 2025, and that the market price in January 2026 was $3.08 per gallon. Prepare the journal entry for when the materials are received in January 2026. (List all debit entries before credit entries. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No entry" for the account titles and enter O for the amounts.) Date Jan. 2026 Account Titles and Explanation III Debit Credit

Name: At December 31, 2025, Sarasota Company has outstanding noncancelable
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Description: At December 31, 2025, Sarasota Company has outstanding noncancelable purchasecommitments for 39,500 gallons, at $3.42 per gallon, of raw material to be used in itsmanufacturing process. The company prices its raw material inventory at cost or market

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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