On September 5, 2021, Howard Corporation signed a purchase commitment to purchase inventory for $130,000 on ar before March 31, 2022. The company's fiscal year-end is December 31. The contract was exercised on March 4, 2022, and the inventory was purchased for cash at the contract price. On the purchase date of March 4, the market price of the inventory was $116,000. The market price of the inventory on December 31, 2021, was $120,000. The company uses a perpetualinventory system.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Record the purchase of inventories.
Note: Enter debits before credits.
Date
General Journal
Debit
Credit
March 04, 2022
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Transcribed Image Text:orksheet Record the purchase of inventories. Note: Enter debits before credits. Date General Journal Debit Credit March 04, 2022 < Prev 10 of 15 Next >
On September 5, 2021, Howard Corporation signed a purchase commitment to purchase inventory for $130,000 on or before March
31. 2022. The company's fiscal year-end is December 31. The contract was exercised on March 4, 2022, and the inventory was
purchased for cash at the contract price. On the purchase date of March 4, the market price of the inventory was $116,000. The market
price of the inventory on December 31, 2021, was $120,000. The company uses a perpetual inventory system.
Required:
1. Prepare the necessary adjusting journal entry (if any is required) on December 31, 2021.
2. Prepare the journal to record the purchase on March 4, 2022.
Complete this question by entering your answers in the tabs below.
Required 1
Required 2
Prepare the necessary adjusting journal entry (if any is required) on December 31, 2021. (If no entry is required for a transaction/event,
select No joumal entry reguired" in the first account field.)
View transacion list
Journal entry worksheet
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Transcribed Image Text:On September 5, 2021, Howard Corporation signed a purchase commitment to purchase inventory for $130,000 on or before March 31. 2022. The company's fiscal year-end is December 31. The contract was exercised on March 4, 2022, and the inventory was purchased for cash at the contract price. On the purchase date of March 4, the market price of the inventory was $116,000. The market price of the inventory on December 31, 2021, was $120,000. The company uses a perpetual inventory system. Required: 1. Prepare the necessary adjusting journal entry (if any is required) on December 31, 2021. 2. Prepare the journal to record the purchase on March 4, 2022. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Prepare the necessary adjusting journal entry (if any is required) on December 31, 2021. (If no entry is required for a transaction/event, select No joumal entry reguired" in the first account field.) View transacion list Journal entry worksheet < Prev 10 of 15 Next >
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