During the current fiscal year, Sandhill Corp. signed a long-term non-cancellable purchase commitment with its primary supplier.Sandhill agreed to purchase $1.92 million of raw materials during the next fiscal year under this contract. At the end of the currentfiscal year, the raw material to be purchased under this contract had a market value of $1.56 million. What is the journal entry at theend of the current fiscal year?Debit Loss on Purchase Commitments for $360000 and credit Estimated Liability on Purchase Commitment for $360000No journal entry is requiredO Debit Loss on Purchase Commitments for $1560000 and credit Estimated Liability on Purchase Commitments for$1560000○ Debit Estimated Liability on Purchase Commitments for $360000 and credit Loss on Purchase Commitments for $360000

The correct journal entry at the end of the current fiscal year would be : Debit Estimated Liability…

Answered: During the current fiscal year,…

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

Chapter17: Advanced Issues In Revenue Recognition

Section: Chapter Questions

Problem 19RE

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During 2019, the Mitt Co. signed a non-cancellable contract to purchase 2,000 units of a raw material at P 32 per pound. On December 31, 2019, the market price of the raw material is P 26 per unit, and the selling price of the finished product is expected to decline accordingly.The financial statement prepared for 2019 should report a. A loss of P 12,000 in the statement of comprehensive income. b. An appropriation of retained earnings for P 12,000. c. Nothing regarding this matter. d. A note describing the expected loss on the purchase commitment.
Splish Company signed a long-term noncancelable purchase commitment with a major supplier to purchase raw materials in 2021 at a cost of $905,300. On December 31, 2020, the raw materials to be purchased have a market value of $854,700. In 2021, Splish paid $905,300 to obtain the raw materials which were worth $854,700. Splish uses a periodic inventory system.Prepare the entry to record the purchase.
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Koolman Construction Company began work on a contract in 2019. The contract price is 3,000,000, and the company determined that its performance obligation was satisfied over time. Other information relating to the contract is as follows: Required: 1. Compute the gross profit or loss recognized in 2019 and 2020. 2. Prepare the appropriate sections of the income statement and ending balance sheet for each year.
or each of the separate revenue contract scenarios 1 through 5, (a) measure the transaction price and (b) determine whether the transaction price is fixed, variable, or some combination of both. 1. Loyola Inc. sells $70,000 of inventory during the year to customers for $140,000. Loyola Inc. accepts returns up to 3 months after the date of purchase. Loyola estimates returns to be 6% of sales. a. Transaction price Answer b. Variable consideration Answer Fixed consideration Answer 2. Nakoma Corp. sells product offering a retroactive volume discount on certain cumulative sales volumes as follows: 0 to 500 units cost $10 each; 501 to 1,000 units cost $9 each; 1,001 units and beyond cost $8 each. For Nakoma’s largest customer, Nakoma estimates the likelihood of cumulative purchases for the year as follows: 15% for 400 units, 50% for 800 units, and 35% for 1,200 units. The revenue contract stipulates that the price per unit of product will be adjusted retroactively once…
Kemper Company signed a long-term noncancelable purchase commitment with a major supplier to purchase raw materials in 2021 at a cost of $1,000,000. At December 31, 2020, the raw materials to be purchased have a market value of $950,000. Prepare any necessary December 31, 2020, entry.
ABC Company has an equipment acquired on January 1, 2018 at a cost of P2,200,000 with estimated residual value of P200,000 and 20 years estimated useful life. On December 31, 2021, the replacement cost of the equipment is P2,400,000. Two years after, the depreciated replacement cost has declined to 1,470,000. Round off percentage to whole number and gross-up value to the nearest peso if you are required to gross up. On December 31, 2024, the equipment’s carrying value is
A company which prepares financial statements to 31 December classifies a non-current asset as held for sale on 1 SEPTEMBER 20X2. The asset's carrying amount at that date is $20,000 and its fair value is $15,600, with estimated costs to sell of $600. The asset is sold in June 20X3 for $16,000(net of costs). Calculate any impairment losses or gains that should be recognised in the company's statement of profit or loss for the year ended 31 December 20X2 if the asset's fair value less costs to sell at 31 December 20X2 is: a)14,000 b)17,000 c)22,000 In each case, also calculate the profit or loss that should be recognised on the disposal of the asset in 20X3 and comment on the results shown.
The following pretax amounts pertain to Han Ae Sook Company for the year ended December 31, 2020: Sales -P800,000; Distribution and administrative costs – P84,000; Other income - P40,000; Interest expense - P4,000; Cost of goods sold – P480,000; Correction of prior period error (credit) – P16,000; Discontinued operations (debit) – P40,000; Cumulative effect of change in accounting policy (credit) – P28,000; Retained earnings, January 1 (not restated) – P160,000; Dividends declared – P12,000; Income tax rate is 30%. How much retained earnings would be shown on December 31, 2020 statement of financial position? А. Р310,400 В. Р335,600 C. P341,200 D. P344,800
On September 5, 2024, Howard Corporation signed a purchase commitment to purchase inventory for $137, 000 on or before March 31, 2025. The company's fiscal year-end is December 31. The contract was exercised on March 4, 2025, and the inventory was purchased for cash at the contract price. On the purchase date of March 4, 2025, the market price of the inventory was $121, 600. The market price of the inventory on December 31, 2024, was 5126,300. The company uses a perpetual inventory system. Required: Prepare the necessary adjusting journal entry (if any is required) on December 31, 2024. Prepare the journal to record the purchase on March 4, 2025.
Please Correct solution with Explanation and Do not give Image format
On December 28, 2024, Videotech Corporation (VTC) purchased 14 units of a new satellite uplink system from Tristar Communications for $23,000 each. The terms of each sale were 110/110 , n30/n30 . VTC uses the net method to account for purchase discounts and a perpetual inventory system. VTC paid the net-of-discount amount on January 6, 2025. Prepare the necessary journal entries assuming that VTC uses the net method to account for purchase discounts. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Videotech Corporation (VTC) purchased 14 units of a new satellite uplink system from Tristar Communications for $23,000 each. The terms of each sale were 1/10, n/30. Record the purchase on December 28, 2024. Videotech Corporation (VTC) purchased 14 units of a new satellite uplink system from Tristar Communications for $23,000 each. The terms of each sale were 1/10, n/30. Record the payment on January 6, 2025.

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