During 2005, Sonic entered in a non-cancellable commitment to purchase 320,000 units of inventory at fixed price of P5 per unit, delivery to be made in 2006. On December 31, 2005, the purchase price of this inventory item had fallen to P4.40 per unit. The good covered by the purchase contract were delivered on January 28, 2006. What is the estimated liability on purchase equipment?
During 2005, Sonic entered in a non-cancellable commitment to purchase 320,000 units of inventory at fixed price of P5 per unit, delivery to be made in 2006. On December 31, 2005, the purchase price of this inventory item had fallen to P4.40 per unit. The good covered by the purchase contract were delivered on January 28, 2006. What is the estimated liability on purchase equipment?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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During 2005, Sonic entered in a non-cancellable commitment to purchase 320,000 units of inventory at fixed price of P5 per unit, delivery to be made in 2006. On December 31, 2005, the purchase price of this inventory item had fallen to P4.40 per unit. The good covered by the purchase contract were delivered on January 28, 2006. What is the estimated liability on purchase equipment?
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