During 2020, ABC Company signed a non-cancelable contract with XYZ Company to purchase 5,000 units of goods at P 1,500 per unit with delivery to be made in 2021. On December 31,2020, the price had fallen to P 1,450 per unit. On March 1,2021, the price per unit further decreased to P 1,350. What is the amount of loss on purchase commitments recognized upon delivery of the 1,000 sacks on March 1,2021? P 750,000 P 250,000 P 500,000 P 50
During 2020, ABC Company signed a non-cancelable contract with XYZ Company to purchase 5,000 units of goods at P 1,500 per unit with delivery to be made in 2021. On December 31,2020, the price had fallen to P 1,450 per unit. On March 1,2021, the price per unit further decreased to P 1,350. What is the amount of loss on purchase commitments recognized upon delivery of the 1,000 sacks on March 1,2021? P 750,000 P 250,000 P 500,000 P 50
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter22: Accounting For Changes And Errors.
Section: Chapter Questions
Problem 2RE: Heller Company began operations in 2019 and used the LIFO method to compute its 300,000 cost of...
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During 2020, ABC Company signed a non-cancelable contract with XYZ Company to purchase 5,000 units of goods at P 1,500 per unit with delivery to be made in 2021. On December 31,2020, the price had fallen to P 1,450 per unit. On March 1,2021, the price per unit further decreased to P 1,350.
What is the amount of loss on purchase commitments recognized upon delivery of the 1,000 sacks on March 1,2021?
- P 750,000
- P 250,000
- P 500,000
- P 50
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