Carla Vista Corporation, a manufacturer of Mexican foods, contracted in 2020 to purchase 2700 pounds of a spice mixture at $5.70 per pound, delivery to be made in spring of 2021. By 12/31/20, the price per pound of the spice mixture had dropped to $5.40 per pound. In 2020, Carla Vista should recognize a loss of $15390.00. no gain or loss. a loss of $810.00. a gain of $810.00.

Carla Vista Corporation, a manufacturer of Mexican foods, contracted in 2020 to purchase 2700 pounds of a spice mixture at $5.70 per pound, delivery to be made in spring of 2021. By 12/31/20, the price per pound of the spice mixture had dropped to $5.40 per pound. In 2020, Carla Vista should recognize a loss of $15390.00. no gain or loss. a loss of $810.00. a gain of $810.00.

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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Question

a loss of $15390.00.

no gain or loss.

a loss of $810.00.

a gain of $810.00.

Expert Solution

Step 1

Given:

Price in 2020 = $5.70

Price in 2021 = $5.40

Decrease in Price = $0.30

Step by step

Solved in 2 steps

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