Snackums, Incorporated, purchases wheat for use in its food manufacturing process. Snackums operates in a highly competitive industry and is rarely able to increase its sales price. • On January 1, 2024, Snackums estimates that it only has enough wheat inventory to meet its manufacturing needs for the first half of 2024, and forecasts the purchase of 20,000 bushels of wheat on June 30, 2024, from its supplier, Trigo Farms. ⚫ Because Snackums is concerned that the price of wheat will increase during the coming months it enters into four June wheat futures contracts on January 1, 2024, to purchase wheat. • Each futures contract is based on the purchase of 5,000 bushels of wheat at $6.73 per bushel on June 30, 2024, and will settle in cash at maturity. (For purposes of this problem, the daily margin accounts with the clearinghouse are ignored.) • The company must report changes in the fair value of its hedging instruments each quarter. The fair value of the futures contract at inception is zero. ⚫ Snackums designates the futures contract as a hedge of the variability of cash flows attributed to changes in the spot price of wheat for its forecasted purchase of wheat. • Since the critical terms of the forward contract and the forecasted purchase are exactly the same, Snackums concludes that the hedging relationship is expected to be 100% effective. The spot and forward prices per bushel of wheat and the fair value of the forward contract are as follows: The spot and forward prices per bushel of wheat and the fair value of the forward contract are as follows: Date January 1, 2024 March 31, 2024 June 30, 2024 Required: Spot Price (per bushel) $6.68 $6.72 $6.90 1. Calculate the net cash settlement at June 30, 2024. Futures Price (per bushel) $6.73 $6.77 n/a 2. Prepare the journal entries for the period January 1 to June 30, 2024, to record the forecasted purchase transaction, necessary adjustment for changes in the fair value of the futures contract, and settlement of the contract. Assume that Snackums purchases the wheat inventory from Trigo Farms on June 30, 2024, as anticipated. 3. During the third quarter, Snackums uses all of the wheat it purchases in production and sells the related inventory. What entry would Snackums make during the quarter ended September 30, 2024, related to the hedged transaction? en by entering your answers in the tabs below.

Yum​, Inc. is a producer of potato chips. A single production process at Yum​, ​Inc., yields potato chips as the main​ product, as well as a byproduct that can be sold as a snack. Both products are fully processed by the splitoff​ point, and there are no separable costs. For September 2020​, the cost of operations is $485,000. Production and sales data are as​ follows:   Note: There were no beginning inventories on September​ 1, 2020.     Requirements Dialog content starts 1. What is the gross margin forbYum​,​Inc., under the production method and the sales method of byproduct​ accounting? 2. What are the inventory costs reported in the balance sheet on September​ 30, 2020​, for the main product and byproduct under the two methods of byproduct accounting in requirement​ 1? 3. Prepare the journal entries to record the byproduct activities under​ (a) the production method and​ (b) the sales method. Briefly discuss the effects on the financial statements.

Explain why proponents of LIFO argue that it provides a better match of revenue and expenses. In what situations would it not provide a better match? Be specific. The management of the Esquire Oil Company believes that the wholesale price of heating oil that they sell to homeowners will increase again as the result of increased political problems in the Middle East. The company is currently paying $0.80 per gallon. If they are willing to enter an agreement in November 2021 to purchase a million gallons of heating oil during the winter of 2022, their supplier will guarantee the price at $0.80 per gallon. However, if the winter is a mild one, Esquire would not be able to sell a million gallons unless they reduced their retail price and thereby increase the risk of a loss for the year. On the other hand, if the wholesale price did increase substantially, they would be in a favorable position with respect to their competitors. The company’s fiscal year-end is December 31. Discuss the…

Leo Consulting enters into a contract with Highgate University to restructure Highgate’s processes for purchasing goods from suppliers. The contract states that Leo will earn a fixed fee of $66,000 and earn an additional $13,000 if Highgate achieves $130,000 of cost savings. Leo estimates a 70% chance that Highgate will achieve $130,000 of cost savings. Assuming that Leo determines the transaction price as the expected value of expected consideration, what transaction price will Leo estimate for this contract? Transaction price for the contract ?