Give the entry in January 2021, when the 63,000-pound shipment is received, assuming that the situation given in (a) above existed at December 31, 2020, and that the market price in January 2021 was $10.00 per pound. Also assume that Shamrock uses a perpetual inventory system. Prepare the journal entry for when the materials are received in January 2021. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit Jan. 2021
Give the entry in January 2021, when the 63,000-pound shipment is received, assuming that the situation given in (a) above existed at December 31, 2020, and that the market price in January 2021 was $10.00 per pound. Also assume that Shamrock uses a perpetual inventory system. Prepare the journal entry for when the materials are received in January 2021. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit Jan. 2021
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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At December 31, 2020, Shamrock, Inc., a manufacturer, has outstanding noncancelable purchase commitments for 63,000 pounds of raw material to be used in its manufacturing process. The purchase commitments require Shamrock, Inc. to pay $14 per pound for the raw material. The company prices its raw material inventory at cost or market, whichever is lower.
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**Scenario:**
In January 2021, a shipment weighing 63,000 pounds is received. It is assumed that the situation described in condition (a) was applicable on December 31, 2020, and the market price for January 2021 is $10.00 per pound. Shamrock uses a perpetual inventory system.
**Task:**
Prepare the journal entry for the materials received in January 2021. Note that credit account titles are automatically indented when the amount is entered, and there should be no manual indentation.
**Journal Entry Table:**
| Date | Account Titles and Explanation | Debit | Credit |
|-----------|--------------------------------|-------|--------|
| Jan. 2021 | | | |
| | | | |
| | | | |
**Instructions:**
- Input the appropriate account titles and explanations in the table.
- Fill in the debit and credit columns with the corresponding amounts.
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