Multiple Choice$26,000.32$35.000.cesNone.$9.000NexPrevraw On July 10, 2021, Johnson Corporation signed a purchase commitment to purchase inventory for $350,000 on or before February 15, 2022.The company's fiscal year-end is December 31. The contract was exercised on February 1, 2022, and the inventory was purchased for cash atthe contract price. On the purchase date of February 1, the market price of the inventory was $359,000. The market price of the inventory onDecember 31, 2021, was $324,000. The company uses a perpetual inventory system.How much loss on purchase commitment will Johnson recognize in 2021?Multiple Choice$26,000335.000< Prey4 of 15Next >

The purchase commitment seems to be a binding agreement to buy products or services from a provider.…

Answered: $26,000.

Business

Accounting

$26,000.

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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Concept explainers

Production Budget

A budget can be defined as a financial plan designed by an undertaking for a definite period in the future that can contribute towards enhancing the financial success of the business undertaking. It is used to estimate the revenue and expenses. The budget generally takes into account both current and future income and expenses.

Question

Multiple Choice
$26,000.
32
$35.000.
ces
None.
$9.000
Nex
Prev
raw

On July 10, 2021, Johnson Corporation signed a purchase commitment to purchase inventory for $350,000 on or before February 15, 2022.
The company's fiscal year-end is December 31. The contract was exercised on February 1, 2022, and the inventory was purchased for cash at
the contract price. On the purchase date of February 1, the market price of the inventory was $359,000. The market price of the inventory on
December 31, 2021, was $324,000. The company uses a perpetual inventory system.
How much loss on purchase commitment will Johnson recognize in 2021?
Multiple Choice
$26,000
335.000
< Prey
4 of 15
Next >

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