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December 31, 2025, Sarasota Company has outstanding noncancelable purchase commitments for 39,500 gallons, at $3 on, of raw material to be used in its manufacturing process. The company prices its raw material inventory at cost or mar chever is lower, and uses a perpetual inventory system.

December 31, 2025, Sarasota Company has outstanding noncancelable purchase commitments for 39,500 gallons, at $3 on, of raw material to be used in its manufacturing process. The company prices its raw material inventory at cost or mar chever is lower, and uses a perpetual inventory system.

FINANCIAL ACCOUNTING
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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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. (b2) Assuming that the market price as of December 31, 2025, is $3.08, record the journal entry. (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 "N entry" for the account titles and enter O for the amounts.) Date Account Titles and Explanation Dec. 31 Debit Credit
Transcribed Image Text: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. (b2) Assuming that the market price as of December 31, 2025, is $3.08, record the journal entry. (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 "N entry" for the account titles and enter O for the amounts.) Date Account Titles and Explanation Dec. 31 Debit Credit
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