Numbers 22-24 (Purchase Commitment) During 2022, Tartarus Company signed a noncancellable contract to purchase 5,000 sacks of rice at P1,800 per sack with delivery to be made in 2022. On December 31, 2022, the price of rice had fallen to P1,700 per sack. On April 15, 2023, Tartarus Company accepts delivery of rice when the price is P1,760 per sack. 22. In December 31, 2022 income statement, what amount of loss on purchase commitment should be recognized? a. 500,000 b. 200,000 c. 300,000 d. 0 23. What amount of recovery of loss on purchase commitment should Tartarus recognize on April 15, 2023? a. 500,000 b. 200,000 с. 300,000 d. 0 24. What amount of purchases should be recorded on April 15, 2023? a. 9,000,000 b. 8,500,000 c. 8,800,000 d. 8,200,000
Numbers 22-24 (Purchase Commitment) During 2022, Tartarus Company signed a noncancellable contract to purchase 5,000 sacks of rice at P1,800 per sack with delivery to be made in 2022. On December 31, 2022, the price of rice had fallen to P1,700 per sack. On April 15, 2023, Tartarus Company accepts delivery of rice when the price is P1,760 per sack. 22. In December 31, 2022 income statement, what amount of loss on purchase commitment should be recognized? a. 500,000 b. 200,000 c. 300,000 d. 0 23. What amount of recovery of loss on purchase commitment should Tartarus recognize on April 15, 2023? a. 500,000 b. 200,000 с. 300,000 d. 0 24. What amount of purchases should be recorded on April 15, 2023? a. 9,000,000 b. 8,500,000 c. 8,800,000 d. 8,200,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
22-24
Transcribed Image Text:Numbers 22-24
(Purchase Commitment)
During 2022, Tartarus Company signed a noncancellable contract to purchase 5,000 sacks of
rice at P1,800 per sack with delivery to be made in 2022. On December 31, 2022, the price of
rice had fallen to P1,700 per sack. On April 15, 2023, Tartarus Company accepts delivery of
rice when the price is P1,760 per sack.
22. In December 31, 2022 income statement, what amount of loss on purchase commitment
should be recognized?
a. 500,000
b. 200,000
c. 300,000
d. 0
23. What amount of recovery of loss on purchase commitment should Tartarus recognize on
April 15, 2023?
a. 500,000
b. 200,000
c. 300,000
d. 0
24. What amount of purchases should be recorded on April 15, 2023?
a. 9,000,000
b. 8,500,000
c. 8,800,000
d. 8,200,000
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