Problem 12-12 (IAA)On November 15, 2020, Diamond Company entered into acommitment to purchase 10,000 ounces of gold on February15, 2021 at a price of P310 per ounce.On December 31, 2020, the market price of gold is P270 perounce. On February 15, 2021, the price of gold is P300 perounce.4. What amount should be recognized as accounts payableon February 15, 2021?a. 2,700,000b. 3,100,000c. 3,500,000d. 3,000,000354

Step 1 In case of foreign currency transactions the amount to be recorded must be converted to the…

On November 15, 2020, Diamond Company entered into a commitment to purchase 10,000 ounces of gold on 15, 2021 at a price of P310 per ounce. February On December 31, 2020, the market price of gold is P270 ounce. On February 15, 2021, the price of gold is P300 per per ounce.

On November 15, 2020, Diamond Company entered into a commitment to purchase 10,000 ounces of gold on 15, 2021 at a price of P310 per ounce. February On December 31, 2020, the market price of gold is P270 ounce. On February 15, 2021, the price of gold is P300 per per ounce.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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On November 15, 2020, Diamond Company entered into a Problem 12-12 (IAA) On November 15, 2020, Diamond Company entered into commitment to purchase 10,000 ounces of gold 15, 2021 at a price of P310 per ounce. on February On December 31, 2020, the market price of gold is P270 Der ounce. On February 15, 2021, the price of gold is P300 per per ounce. on December 31, 2020? a. 400,000 b. 100,000 300,000 d. с. 2. What is the gain on purchase commitment to be recognized on February 15, 2021? 400,000 b. 300,000 100,000 а. с. d. 3. What amount should be debited to purchases on February 15, 2021? a. 3,000,000 b. 3,100,000 с. 2,700,000 d. 3,500,000 4. What amount should be recognized as accounts payable on February 15, 2021? a. 2,700,000 b. 3,100,000 c. 3,500,000 d. 3,000,000
3. On April 1, 2021, XYZ CO. issued a 9% interest bearing note with a face amount of P 30,000,000 for the purchase of a machine. The note is payable in five equal annual installments starting on March 31,2022. Interest is payable annually base on the remaining balance. There is no established cash price for the equipment. The prevailing market rate of interest for a note of this type is 12%. How much should be presented as part of non-current liabilities in related to the notes as of December 31,2022 in the statement of financial position?
On January 1, 2022, Slack Company finished legal services and accepted in exchange a 5% $400,000 promissory note with a due date of December 31, 2024. Interest is receivable on January 1 of each year. Notes with similar risk have a market rate of interest of 10%. Set financial calculators to zero decimal place. Required: (a) Determine the value of the following: N = I/Y = PMT = $ FV = $