During 2015, AD Company signed a non-cancelable contract with BARD Company to purchase 5,000, 50-kilos sacks of rice at P1,700 per sack with delivery to be made on June 1, 2020. On December 31, 2015, the price of rice had fallen to P1,680 per sack. On June 1, 2016, the price per sack of rice has further decrease to P1,540. In A’s December 31,2016 profit and loss, how much is reported as loss on purchase commitments?
During 2015, AD Company signed a non-cancelable contract with BARD Company to purchase 5,000, 50-kilos sacks of rice at P1,700 per sack with delivery to be made on June 1, 2020. On December 31, 2015, the price of rice had fallen to P1,680 per sack. On June 1, 2016, the price per sack of rice has further decrease to P1,540. In A’s December 31,2016 profit and loss, how much is reported as loss on purchase commitments?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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During 2015, AD Company signed a non-cancelable contract with BARD Company to purchase 5,000, 50-kilos sacks of rice at P1,700 per sack with delivery to be made on June 1, 2020. On December 31, 2015, the price of rice had fallen to P1,680 per sack. On June 1, 2016, the price per sack of rice has further decrease to P1,540. In A’s December 31,2016
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