**Pearl Commodities Company Purchase Commitment Overview**Pearl Commodities Company has entered into a long-term, non-cancelable purchase commitment with a major vegetable supplier. The agreement specifies the purchase of produce in 2021 at a cost of $637,000. However, as of December 31, 2020, the market value of the produce is $573,300.**Accounting Entry Guidance for December 31, 2020**To properly reflect this commitment in the company's financial statements, any necessary journal entry as of December 31, 2020, should be prepared.- Credit account titles will be automatically indented once the amount is entered. Manual indentation is not required.**Journal Entry Template**Below is the template to record the necessary accounting entries:| Date | Account Titles and Explanation | Debit | Credit ||--------|--------------------------------|-------|--------|| Dec. 31| | | || | | | |This structure helps in maintaining accurate financial records by adjusting the entries as per the changes in market conditions and future commitments.

Working:- Estimated liability on purchase commitment = $637,000 - $573,300…

Pearl Commodities Company signed a long-term noncancelable purchase commitment with a major vegetable supplier to purchase produce in 2021 at a cost of $637,000. At December 31, 2020, the produce to be purchased has a market value of $573,300. Prepare any necessary December 31, 2020 entry. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)

Pearl Commodities Company signed a long-term noncancelable purchase commitment with a major vegetable supplier to purchase produce in 2021 at a cost of $637,000. At December 31, 2020, the produce to be purchased has a market value of $573,300. Prepare any necessary December 31, 2020 entry. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

On November 1, 2024, Wildhorse Farm entered into a contract to buy a $159000 harvester from John Deere. The contract required Wildhorse Farm to pay $159000 in advance on November 1, 2024. The harvester (cost of $119000) was delivered to Wildhorse Farm on November 30, 2024. The journal entry for John Deere to record the contract on November 1, 2024 includes a credit to Accounts Receivable for $159000. debit to Unearned Sales Revenue for $159000. credit to Sales Revenue for $159000. O credit to Unearned Sales Revenue for $159000.
as show in the pic
Gansac Publishing Company signed a contract with an author to publish her book. The signing took place on January 1, 2019, and a payment of $20,000 was made to obtain a copyright. Gansac expects to sell 200,000 books evenly between 2019 and 2023 at a price of $10 per book. Required: 1. Prepare journal entries to record the events related to the copyright and sales of the book during 2019 and 2020, assuming that sales were as projected. 2. Next Level How would your answer change if Gansac expected sales of the book to be 100,000 copies in 2019, 80,000 copies in 2020, and 20,000 copies over the remainder of the copyright’s useful life?
Don't provide answers in image format
Headland sells its specialty combination gas/wood-fired grills to local restaurants. Each grill is sold for $1,010 (cost $536) on credit with terms 2/30, net/90. Prepare the journal entries for the sale of 20 grills on September 1, 2020, and upon payment, assuming the customer paid on (1) September 25, 2020, and (2) October 15, 2020. Assume the company records sales net. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No entry" for the account titles and enter 0 for the amounts.) Account Titles and Explanation Accounts Receivable Sales Revenue To record sales) Cost of Goods Sold Inventory To record cost of goods sold) Cash Accounts Receivable Accounts Receivable Sales Revenue To record sales) Cost of Goods Sold Inventory. To record cost of goods sold) Cash Accounts Receivable Sales Discounts Forfeited Debit Credit
On December 20, 2020, Guijo Company purchased goods with a list price of P810,000 from a supplier. The term of the purchase was 10, 3/10, 1/20, n/30. The account was fully paid on January 4, 2021. If Guijo used the gross method in recording its purchases, how much is the net amount of Accounts Payable to be reported on the 2020 Balance Sheet?
On July 15, 2021, the Nixon Car Company purchased 2,800 tires from the Harwell Company for $35 each. The terms of the sale were 2/10, n/30. Nixon uses a perpetual inventory system and the net method of accounting for purchase discounts. a. Prepare the journal entries to record the purchase on July 15 and payment on July 23, 2021.b. Prepare the journal entry for the payment, assuming instead that it was made on August 15, 2021. c.If Nixon instead uses a periodic inventory system, explain any changes to the journal entries created in requirements 1 and 2. The July 15th entry would include a debit to the ________ account instead of to ___________.
Vinubhai
On October 5, 2020, a company enters into a contract to transfer a product to the customer. It is agreed that the customer will pay the full price of $50,000 in advance on October 10, 2020. The customer pays on October 10, 2020, and company delivers the product on October 26, 2020. When will the (seller) company make its first journal entry related to the above? Choose from 5, 10, and 26, and enter the date only.
On November 1, 2019, Sherman Company sold $20,000 of merchandise inventory to a customer that originally cost $11,000. Sherman accepted a 90 day note receivable from the customer as payment for the inventory. The customer agreed to a 4% interest rate and will pay both principle and interest on January 31, 2020. Sherman Company closes their accounting records on December 31 and will need to prepare financial statements on that date. Required: Prepare journal entries for Sherman Company for: 1) November 1, 2019 – the date of sale 2) December 31, 2019 – adjustment (to recognize interest revenue) 3) January 31, 2020 – to record customer payment of principle and interest
ezto Saved Zing Cell Phone Company entered into the following transactions involving current liabilities during 2020 and 2021. 2020 14 Purchased merchandise on credit from Ferris Inc. for $170,000. The terms were 1/10, n/30 (assume a perpetual inventory system). 14 Zing paid $40,000 cash and replaced the $130, 000 remaining balance of the account payable to Ferris Inc. with a 6x, 60-day note payable. 21 Borrowed $140,000 from Scotiabank by signing 5.5%, 90-day note. ? Paid the note to Feris Inc. at maturity. ? Paid the note to Scutiabank at maturity. 15 Borrowed $115,000 and signed a 6.25%, 120-day note with National Bank. 31 Recorded an adjusting entry for the accrual of interest on the note to National Bank. 2021 ? Pald the note to National Bank at maturity. Mar. Apr. 02:48.04 May Dec. Dec. Required: 1. Determine the maturity dates of the three notes just described. Ferris Inc. Scotiabank National Bank Maturity date Jun. 13 Aug. 19 Apr. 14
On November 1, 2021, Sheridan Farm entered into a contract to buy a $155000 harvester from John Deere. The contract required Sheridan Farm to pay $155000 in advance on November 1, 2021. The harvester (cost of $115000) was delivered on November 30, 2021. The journal entry to record the delivery of the equipment includes a credit to Cost of Goods Sold for $115000. debit to Unearned Sales Revenue for $155000. debit to Inventory for $115000. credit to Unearned Sales Revenue for $155000.