How much should be recognized as loss on purchase commitment on December 31, 2020?

Q: Looking back on the entire situation (i.e., the original transaction and the forward contract) in…

A: Forward rate is the rate fixed today for the transaction price which is to be paid or received at a…

Q: At the end of the fiscal year, Apha Airlines has an outstanding purchase commitment for the purchase…

A: Since company prices it's inventory at lower of cost or market value the difference between cost and…

Q: In January 2024, Continental Fund Services, Incorpo services. The company will receive a management…

A: The total amount of compensation that a seller expects to get from a client in exchange for…

Q: time over the next year, or to settle the contract on a net basis for the difference between the…

A: Purchase commitment contract is the contract will the supplier to supply goods at a fixed price.

Q: During 2020, ABC Company sold 500,000 boxes of brownies mix under a new sales promotional program.…

A: The question is based on the concept of Financial Accounting.

Q: August 2021, Commonlo Corp. commits to selling 100 of its merchandise to M&H Co. for P30,000 (P300…

A: As per IAS 15 Revenue recognition  When distinct goods or services are provided at standalone…

Q: During 2020, Maine Company Sold 50,000 boxes of hotcakes under a new sales promotional program. Each…

A: Total estimated coupons that should be redeemed = 50,000 boxes ×80% = 40,000

Q: In December 2021, Jordan Inc and Otter-Manufacturing signed a 3 year contract for Jordon to update…

A: Present value of amount to be received = annual payments x Present value factor for advance payment…

Q: During August 5, 2020, Hiro marketing sold an item worth P 500,000 for P 750,000. The required down…

A: Accounting's goals include keeping a systematic record of all financial transactions in a book of…

Q: On January 01, 2022, Noelydio entered into a contract with Baby Lyra to build an item of specialized…

A: Transaction price means price at which product is being sold to customers. This is also known as…

Q: On March 1, 2021, Gold Examiner receives $166,000 from a local bank and promises to deliver 96 units…

A: Lets understand the basics. Revenue recognition needs to do using the IFRS 15 "Revenue from…

Q: In the December 31, 2020 Income Statement, what amount of loss on purchase commitment should be…

A: Step 1 Loss is to be reported on the basis of contracted amount over the fair value.

Q: August 2021, Commonlo Corp. commits to selling 100 of its merchandise to M&H Co. for P30,000 (P300…

A: As per IAS 15 Revenue recognition the contract modification will be treated as part of existing…

Q: During 2021, Tartarus Company signed a noncancellable contract to purchase 500 sacks of rice at P900…

A: Answer with explanation are as follows.

Q: On October 2, 2020, Ivanhoe Company sold $5,630 of its elite camping gear (with a cost of $3,320) to…

A: Sales Agreement: An contract of sale specifies the terms and conditions under which the seller will…

Q: Pasu International purchased a plant in Louisiana on December 31, 2015, and financed $20,000,000 of…

A: Hedging against an investment risk is termed for strategically implementing the instruments and…

Q: Commando Corp. agrees to sell 100 of its products to M&H Co. for P30,000 in August 2021. (P300 per…

A: The original sale price of the products sold prior to alteration will not be modified. As previously…

Q: During 2020, Leni Robredo entered in a non-cancellable commitment to purchase 320,000 units of…

A: As per IAS 2 , Inventory is to be measured at lower of cost or Net realizable value.  Further…

Q: Give the entry in January 2021, when the 63,000-pound shipment is received, assuming that the…

A: Unrealized Holding Gain or Loss = 63,000 * ($14 - $10) = $252,000

Q: A company enters into a contract to build a factory for a customer. The agreed price is $3,000,000…

A: Given: - Agreed price= $3,000,000 Incentive= $300,000 Deduction (if project is not completed until…

Q: During 2020, BIOT Company signed a non-cancelable contract with BTS Company to purchase 5,000 units…

A: Formula: Loss on purchase = contract signed price - decrease in price.

Q: On December 31, 2020, Unger Co., (which reports under ASPE), has $4,000,000 of short-term notes…

A: Step 1: Determine the applicable ASPE principle Under ASPE, subsequent events that provide…

Q: ZEN Ltd signs a contract on 30 June 2019, agreeing to build a bridge for XYN at a contract price of…

A: Cost(an input measure) method:- In this approach, the percentage of completion is based on the costs…

Q: Commonly Corp. agrees to sell 100 of its products to M&H Co. for P30, 000 in August 2021. (P300 per…

A: Cash reserves are the bank's cash and cash equivalents profits that are saved for upcoming business…

Q: Bhd purchased an additional 3,000 boxes of masks from D'Mask. D'Mask then estimated that Topeng…

A: The question deals with IFRS 15 "Revenue from contracts with customers".  As per IFRS 15, revenue is…

Q: At December 31, 2020, Shamrock, Inc., a manufacturer, has outstanding noncancelable purchase…

A: Purchase commitment is an agreement between buyer and seller to purchase a certain number of units…

Q: On March 10, 2020, Pharoah Company sold to Barr Hardware 180 tool with terms of n/60, f.o.b.…

A: These are the accounting transactions that are having a monetary impact on the financial statement…

Q: In September 2025, Carla Vista Corp. commits to selling 139 of its iPhone-compatible docking…

A: Journal Entry :— It is an act of recording transactions in books of account when transaction…

Q: On September 1, 2021, Laguna Grill determined that it will need to purchase 100,000 kilos of tuna…

A: A forward contract means the contract which is used to protect against the price increase in the…

Q: During 2020, ABC Company sold 500,000 boxes of brownies mix under a new sales promotional program.…

A: Net premium expense = Cost of baking pan + Handling and Shipping - Remittance from customer = 50 + 5…

Q: n August 2021, Commonlo Corp. commits to selling 100 of its merchandise to M&H Co. for P30,000 (P300…

A: As per IAS 15 Revenue recognition the contract modification will be treated as part of existing…

Q: ($102 per product). The stations are delivered to Pharoah over the next 6 months. After 84 stations…

A: Journal Entry :— It is an act of recording transactions in books of account when transaction…

Q: On July 10th, 2020X1, a purchase contract for pallet and heavy-duty shelving worth EUR 12,000 (plus…

A: Total cost  Purchase price.            12000 less: discount @3%.    (360) Add: assembly cost.…

Q: On March 10, 2020, Pharoah Company sold to Barr Hardware 180 tool sets at a price of $51 each (cost…

A: Meaning :- Journal Entries:- Journal entries are records of financial transactions that are used to…

Q: h

A: Revenue Recognition :Revenue recognition principle states that every business organization should…

Q: ) Debt covenants or restrictions are commonly used in lending agreements. Discuss how they are used…

A: Debt covenants: These are the rules & regulations mentioned in the agreement of loan between a…

Q: Sarnet Corporation enters into a 4-year construction contract worth $100 million with Gold company…

A: A construction contract is a long-term contract because the construction work takes more than one…