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.1. What is the loss on purchase commitment to be recognizedon December 31, 2020?400,000b. 100,000300,000d.a.с.2. What is the gain on purchase commitment to berecognized on February 15, 2021?400,000b. 300,000100,000d.a.с.0.3. What amount should be debited to purchases onFebruary 15, 2021?a. 3,000,000b. 3,100,000c. 2,700,000d. 3,500,0004. What amount should be recognized as accounts payableon February 15, 2021?a. 2,700,000b. 3,100,000c. 3,500,000d. 3,000,000

1) Loss on purchase commitment to be recognized on December 31, 2020: = (Market price at December…

Problem 12-12 (IAA) On November 15, 2020, Diamond Company entered commitment to purchase 10,000 ounces of gold on Fe 15, 2021 at a price of P310 per ounce. On December 31, 2020, the market price of gold is PS ounce. On February 15, 2021, the price of gold is PS ounce. 1. What is the loss on purchase commitment to be reco on December 31, 2020? a. 400,000 b. 100,000 300,000 d. с. 0. 2. What is the gain on purchase commitment recognized on February 15, 2021? 400,000 b. 300,000 100,000 d. a. с. 3. What amount should be debited to purchase February 15, 2021? a. 3,000,000 b. 3,100,000 c. 2,700,000

Problem 12-12 (IAA) On November 15, 2020, Diamond Company entered commitment to purchase 10,000 ounces of gold on Fe 15, 2021 at a price of P310 per ounce. On December 31, 2020, the market price of gold is PS ounce. On February 15, 2021, the price of gold is PS ounce. 1. What is the loss on purchase commitment to be reco on December 31, 2020? a. 400,000 b. 100,000 300,000 d. с. 0. 2. What is the gain on purchase commitment recognized on February 15, 2021? 400,000 b. 300,000 100,000 d. a. с. 3. What amount should be debited to purchase February 15, 2021? a. 3,000,000 b. 3,100,000 c. 2,700,000

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

SECTION A: COMPULSORY QUESTION ONE next 10 years. A K50,000 at the en Seth Wandi, the owner of Wandi Gold Mining, is evaluating a new gold mine in Namibia 10 percent Kasuba Zulu, the company's geologist, has just finished his analysis of the mine site. He ver) has estimated that the mine would be productive for eight years, after which the gold would be completely mined. Kasuba has taken an estimate of the gold deposits to Samantha Mwamba, the company's financial officer. Samantha has been asked by Seth to perform an analysis of the new mine and present her recommendation on whether the company should open the new mine. Samantha has used the estimates provided by Kasuba to determine the revenues that could be expected from the mine. She has also projected the expense of opening the mine and the annual operating expenses. If the company opens the mine, it will cost K400 million today, and in the eighth year it will have a K35 million in costs associated with closing the mine and…
please help answer
please all parts Find the following accumulated values on December 31, 2020 a) $6000 invested on May 1, 2020 at 3.6% interest. b) $20,000 invested on January 1, 2018 if &t = 0.025 + 0.02t. (c) $15,000 invested at ireal=3.25% on January 1, 2020 if inflation in 2020 is 1.75% d) Payments of $5,000 made every December 31 from 2014 to 2020 at 5% interest.
Exercise 14-17 Presented below are two independent situations:(a) On January 1, 2020, Sage Inc. purchased land that had an assessed value of $349,000 at the time of purchase. A $571,000, zero-interest-bearing note due January 1, 2023, was given in exchange. There was no established exchange price for the land, nor a ready fair value for the note. The interest rate charged on a note of this type is 12%.Determine at what amount the land should be recorded at January 1, 2020, and the interest expense to be reported in 2020 related to this transaction. (Round answers to 0 decimal places, e.g. 38,548.) Land to be recorded at January 1, 2020 $ Interest expense to be reported $ (b) On January 1, 2020, Pronghorn Furniture borrowed $4,500,000 (face value) from Sinise Co., a major customer, through a zero-interest-bearing note due in 4 years. Because the note was zero-interest-bearing, Pronghorn Furniture agreed to sell furniture to this customer at lower than market…
P3.2 M&B Tooling Ltd. is assessing two available options for the purchase of new equipment with a negotiated cash price of $100,000. The manufacturer is willing to accept a down payment of 20% of the purchase price and an instalment note for the balance. The note would require quarterly fixed principal payments (plus interest) starting October 1, 2020, for a period of two years. M&B has a proposal from its bank for an instalment loan for two years that requires a fixed blended monthly payment (including both principal and interest) starting August 1, 2020. The loan would be for 80% of the equipment's purchase price. The current market rate of interest is 8%. Both contracts have an interest rate of 8% b. Calculate the amount of the payments required of M&B under each alternative. Use either a financial calculator or Excel functions in your calculation
Problem 14
Problem 9-19 (Algo) (LO 9-9) Shandra Corporation (a U.S.-based company) expects to order goods from a foreign supplier at a price of 132,000 pounds, with delivery and payment to be made on June 15. On April 15, when the spot rate is $1.47 per pound, Shandra purchases a two-month call option on 132,000 pounds and designates this option as a cash flow hedge of a forecasted foreign currency transaction. The time value of the option is excluded in assessing hedge effectiveness; the change in time value is recognized in net income over the life of the option. The option has a strike price of $1.47 per pound and costs $1,320. The goods are received and paid for on June 15. Shandra sells the imported goods in the local market immediately. The spot rate for pounds is $1.520 on June 15. Required: a-1. Prepare all journal entries for Shandra Corporation related to this transaction and hedge. a-2. What amount should Shandra Corporation report in net income as cost of goods sold for the quarter…
8. How much is the Gross Profit/Loss Realized in 2018? * Triple Take Construction Co. began construction of a project in 2017 for a contract price of P9,600,000. The project is to be completed in 4 years or in the year 2021. The following are the details regarding the construction project 2017 2018 2019 Costs inenered to dnte Estimsted cost to complete Progess Billings to dnte Cash Collectiona for the year 2160,000 4,500,000 7,520,000 6840,000 5,500,000 1,690, 000 2,304,000 4,320,000 7,680,000 1,728.000 3,240,000 5,760,000 9. How much is the Gross Profit/Loss Realized in 2019? * Xurpas Homes entered into a construction agreement in 2018 for the construction of condominium buildings. The original contract price was P20,000,000 but a change order was issued in 2019 that increases the price by P2,000,000. The percentage of completion method is used by the company in recognizing revenue. The following are information regarding the company. 2018 10,200,000 10,200,000 9,800,000 8,760,000…
Dont uplode any images in answer
Impairment of zero-interest notes receivable, GAAP vs. IFRS On December 31, 2020, Firth Company borrowed $62,092 from Paris Bank, signing a 5-year, $100,000 zero-interest note. The note was issued to yield 10% interest. Unfortunately, during 2022, Firth began to experience financial difficulty. As a result, at December 31, 2022, Paris Bank determined that it was probable that it would collect only $75,000 at maturity. The market rate of interest on loans of this nature is now 11%. 1,Instructions: On March 31, 2023, Paris learns that Firth will be able to repay the loan under the original terms. Paris Bank uses IFRS. Prepare the journal entry to be recorded on March 31, 2023, if any. Answer within 45mins.it would be really helpful!
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