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? *

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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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? *
O P 50
O P 750,000
P 500,000
P 250,000
Transcribed Image Text: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? * O P 50 O P 750,000 P 500,000 P 250,000
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