non-cancellable commitment to purchase 120,000 barrels of aviation fuel for P35 per barrel on March 14, 2020. By December 31, 2019 the purchase price had fallen to P25 per barrel. However, by March 14, 2020, when the entity took d
Q: An $800,000 bond issue on which there is an unamortized premium of $57,000 is redeemed for $785,000....
A: Lets understand the basics. Journal entry is required to make to record financial event and transact...
Q: found she could order quality skateboards in basic colours (black, white, blue, etc) for $50 each. S...
A: The answer is stated below:
Q: Instructions: Prepare journal entries to record authorized share capital and the subseque transactio...
A: A memorandum entry is an accounting transaction which does not require to get posted in ledger accou...
Q: S13-5 Allocating profits and losses to the partners Bagwell, McWilliams and Briand have capital bala...
A: It is pertinent to note that residual net income in a partnership is divided between partners based ...
Q: Financial Statements are important. They contain significant information about a company's financial...
A: Financial statements are those statements and reports that are prepared at the end of accounting per...
Q: heir shares of profit or loss for each of the following it 30000 and the partners have no written pa...
A:
Q: A. Barbarossa Ltd is a Turkish factory that produces premium handmade rugs. These rugs go under two ...
A:
Q: Harley Davis Inc. started its unicycle manufacturing business in 2020 and acquired $600,000 of equip...
A: Depreciation expense is the amount depreciated on a company's assets in a single period, whereas acc...
Q: Valencia Corporation has the following liabilities at December 31, 2015: 8.9% note payable issued No...
A: As short term obligation is a current liability, A liability is current when It is expected to be s...
Q: Sheridan Publishing identified the following overhead activities, their respective costs, and their ...
A: Overhead costs are all indirect costs related with the production and manufacturing of goods. These ...
Q: 42. How much is capitalized cost of borrowing?
A: When funds are borrowed specifically for a qualifying asset, costs in relation to that borrowing are...
Q: Discuss the principles and rules outlined in the Standards on Revenue Recognition, IFRS 15 and ASC 6...
A: The IFRS 15 standard’s aim is to reduce variations in the way businesses across various industries h...
Q: What critique can be said about this?
A: Financial ratios (FR) are those ratios which compare the line items of the financial statements (FS)...
Q: The only journal entries to date recorded debits to coupon expense and credits to cash of P715,000. ...
A: Fuller Food Company issues coupons which can be presented by customer to obtain discount on certain ...
Q: ABC Ltd enters into a five-year lease agreement with Legal Ltd on 1 July 2023 for an item of machine...
A: Journal entry - It refers to the process where the business transactions are recorded in the books o...
Q: a) What are the normal and abnormal spoilage units, respectively, for March when using FIFO? b) Usi...
A: Process costing is one of the type and form of costing, under which product has to go through severa...
Q: Problem 7-19 Education Tax Credits (LO 7.5) Janie graduates from high school in 2021 and enrolls in ...
A: On first $ 2,000 2,000 =2000*100% On Next $2,000 500 =2000*25% Total credit...
Q: Goodwill Industries is an Advocate for a) survival of the fittest b) sales tax c) using interview...
A: Goodwill Industries International is a non-profit organization that was started by a young missionar...
Q: Performance Appraisal Score Pay Quartile Excellent Very Good Good Needs Improvement Poor S13.01 - - ...
A: The question requires us to calculate the percentage merit pay increase that Wilma can receive, the ...
Q: amination - Trimester 3 2021 Trimester 3 2021 Final Onlf The auditor decides to increase the calcula...
A: In audits, the materiality level relates to the baseline utilized to establish reasonable assurance ...
Q: When deciding to accept a special order, which of the following costs are relevant? A. Fixed product...
A: When business has option to select one alternative out of two alternatives, then alternative which h...
Q: s for the year ended December 31, 20X1. Account Title Debits Cash $37,500
A: The income statement explains the financial performance of the company for a particular period of ti...
Q: Direct materials: $2,200 Factory overhead: $490 Direct labor: $900 Beginning work in process: none (...
A: Cost of goods manufactured: It is the total cost of production for the company during a particular p...
Q: Sarasota Corp. uses a periodic inventory system. Its records show the following for the month of May...
A: Ending Inventory under FIFO Method is 29 units @ $11 equal to $ 319
Q: Department G had 2,280 units 25% completed at the beginning of the period, 12,600 units were complet...
A: Equivalent units concept is used when opening or ending work in progress is not 100% complete but pa...
Q: beginning of the period to calculate predetermined overhead rates: Forming 7, 000 $ 25,900 $ 2.50 Cu...
A: "Since you have posted a question with multiple sub parts, we will solve first three sub parts for y...
Q: 2. Suriname and Paraguay consume two goods, coffee and machines, and labour is the only input into p...
A: The solution for the above mentioned question is given in the following steps for your reference.
Q: Use the information below to figure out what the Cost of Goods Sold is for the order placed for FIF...
A: Since the No. of units in the order placed are not given, let's assume the order placed is for 150 u...
Q: Prepare all relevant entries relating to the equipment for the period from 1 July 2016 to 30 June 20...
A: Journal entry is recorded at the time when the asset is purchased in the books of the accounts on th...
Q: PROBLEM The following data were taken from the Statement of Affairs of ABC Company: P175,000 90,000 ...
A: Liquidation of the company means cessation or end of the business. Under this, first all assets are ...
Q: Which of the following taxes is not deductible as an itemized deduction? a.Sales tax in a state with...
A: Non Deductible Taxes under itemized deduction: 1. federal income tax 2. Federal, state or local esta...
Q: Direct materials: $2,200 Factory overhead: $490 Direct labor: $900 Beginning work in process: none (...
A: Solution:- Cost of goods manufactured can be computed by cost sheet. Cost sheet is enumerated as bel...
Q: The business manufactures custom patios made of concrete, brick, fiberglass, and lumber- depending u...
A: Answer:- Direct material Work in process Finished goods Beginning inventory 4200 5540 0...
Q: A model NASCAR race car lists for $80.09 with a trade discount of 20%. What is the net price of the ...
A: The net price is the resulted value after deducting the trade discount from the list price.
Q: Shawnee Motors Inc. assembles and sells snowmobile engines. The company began operations on August 1...
A: Variable costing means that inventory is valued at variable manufacturing cost and fixed cost is ign...
Q: At the beginning of its 2013 financial year, Rueda Corporation purchased equipment for $100,000. The...
A: Revaluation of assets means measurement of assets at its fair value. Revaluation can be upward reval...
Q: Prepare the journal entries to record the foregoing transactions, including authorized share capital...
A: Journal entry is made at the time when the company issues the shares to the public which means eithe...
Q: The following pre-closing accounts and balances were drawn from the records of Carolina Company on D...
A: Lets understand the basics. Retained earning is a earning retained which is earned during the previo...
Q: The following production estimates were made for the coming year: Total quilts to be produced 5 A. 2...
A: Manufacturing overhead, also known as indirect costs, which are incurred during the process of produ...
Q: (in millions) 2020 2021 2022 Beginning inventory $2,000 $2,400 $2,600 Ending inventory 2 400 2 600 2...
A: Inventory refers to all of the items, goods, merch, and materials held by a company for the purpose ...
Q: X company just took its physical inventory. The count of inventory items on hand at the company's bu...
A: Under consignment, one party assigns its goods for sale to another party. Goods held on consignment ...
Q: The Harriott manufacturing company uses job order costing system. The company uses machine hours to ...
A: Those goods which complete or incomplete and about to get manufactured into final goods are ready to...
Q: A. Barbarossa Ltd is a Turkish factory that produces premium handmade rugs. These rugs go under two ...
A: Process costing: process costing is a costing method used by companies which produce homogeneous pro...
Q: Activity No. 6 Notes Receivable DUE DATE The date a note is to be paid is called the DUE DATE or Mat...
A: "Since you have posted a question with multiple subparts, we will solve the first three subparts for...
Q: Direct materials: $2,200 Factory overhead: $490 Direct labor: $900 Beginning work in process: none (...
A: Formula: Total Manufacturing cost = Direct materials + Direct labor + Factory overhead
Q: Phil and Linda are 25-year-old newlyweds and file a joint tax return. Linda is covered by a retireme...
A: The maximum contribution limit to Traditional IRA is $ 6000 per person or $ 12000 if MFJ. The phaseo...
Q: Sales Budget Quarter 1 Quarter 2 Quarter 3 Qu...
A:
Q: And the following accounts and balances we taken from the records of Caloy: Cash P 32,354 Accounts R...
A: Total Liabilities = Account payable + Notes Payable
Q: Companies have found that offering discounts to customers in return for early payment can be counter...
A: The additional current assets that a corporation retains on its balance sheet as a liquidity buffer ...
Q: On February 1, 2022, Mr. X promised to pay Ms. Y the amount of ₱10,000.00 at an annual rate of 6%. M...
A: Note payable is a form of promissory note which is a promise given by one person to another person. ...
Problem 8
On November 23, 2019, Guava Company entered intoa non-cancellable commitment to purchase 120,000 barrels of aviation fuel for P35 per barrel on March 14, 2020. By December 31, 2019 the purchase price had fallen to P25 per barrel. However, by March 14, 2020, when the entity took delivery of the 120,000 barrels the price had risen to P40 per barrel.
How much is the recovery of loss on purchase commitment on March 14, 2020?
Step by step
Solved in 2 steps
- In a Nutshell Problem 21 On December 31,2019, Innovation Company sold a machinery costing P5,200,000 which had a carrying amount of P2,200,000 for P3,000,000. The terms of the sales were P600,000 down payment and P1,200,000 payable on December 31 of the next two years. The sale agreement made no mention of interest. However, 9% would be a fair rate for this type of transaction. The present value of an ordinary annuity of 1 at 9% for two years is 1.76. Required: 1. Prepare journal entries for 2019, 2020 and 2021. 2. Determine the carrying amount of the note receivable on December 31,2019, December 31,2020 and December 31,2021 3. Determine the interest income for 2019,2020 and 2021.On November 15, 2021, Marsyl Company entered into a commitment to purchase 100,000 barrels ofaviation fuel for P55 per barrel on March 31, 2022. The company entered into this purchasecommitment to protect itself against the volatility in the aviation fuel market. By December 31, 2021,the purchase price of aviation fuel had fallen to P50 per barrel. However, by March 31, 2022, whenthe company took delivery of the 100,000 barrels, the price of the aviation fuel had risen to P58 perbarrel. How much should be recognized as gain on purchase commitment for the year 2021?d. 3,200,000 On December 1, 2019, an entity entered a commitment to puroChase 200,000 barrels of aviation fuel for P55 per barrel on March 31, 20. The entity entered this purchase commitment to protect itself against the volatility in the aviation fuel market. By December S, 2019, the purchase price of aviation fuel had fallen to P50 per barrel, However, by March 31, 2020, when the entity took delivery of the 100,000 barrels the price of aviation fuel had risen to P53 per barrel. What amount should be recognized as loss on purchase commitment in 2019? ie fomso What amount should be recognized as gain on purchase commitment for 2020? 6 O s ysg n What amount should be debited to purchase on March 31, 2020? 00000a 030.000E
- 51.On November 17, 2020, GGG Airways entered in to a commitment to purchase 3,000 barrels of aviation fuel for P9,000,000 on March 23, 2021. GGG entered into this purchase commitment to protect itself against the volatility in the aviation fuel market. By December 31, 2020, the purchase price of aviation fuel had fallen to P2,200 per barrel. However, by March 23, 2021, when GGG took delivery of the 3,000 barrels, the price of aviation fuel had risen to P2,500 per barrel. How much should be recognized as loss on purchase commitment on December 31, 2020?On November 15, 2021, Marsyl Company entered into a commitment to purchase 100,000 barrels ofaviation fuel for P55 per barrel on March 31, 2022. The company entered into this purchasecommitment to protect itself against the volatility in the aviation fuel market. By December 31, 2021,the purchase price of aviation fuel had fallen to P50 per barrel. However, by March 31, 2022, whenthe company took delivery of the 100,000 barrels, the price of the aviation fuel had risen to P58 perbarrel. How much should be recognized as gain on purchase commitment for the year 2021? The following information has been extracted from the records of Marie Company about one of itsproducts: Units Unit Cost Total CostJan. 1 Beg. balance 10,000 150 P1,500,000Jan. 5 Purchase 10,000…46. During 2021, Tartarus Company signed a noncancellable contract to purchase 500 sacks of rice at P900 per sack with delivery to be made in 2022. On December 31, 2021, the price of rice had fallen to P850 per sack. On May 9, 2022, Tartarus Company accepts delivery of rice when the price is P880 per sack. In December 31, 2021 income statement, what amount of loss on purchase commitment should be recognized?
- On November 15, 2021, Marsyl Company entered into a commitment to purchase 100,000 barrels ofaviation fuel for P55 per barrel on March 31, 2022. The company entered into this purchasecommitment to protect itself against the volatility in the aviation fuel market. By December 31, 2021,the purchase price of aviation fuel had fallen to P50 per barrel. However, by March 31, 2022, whenthe company took delivery of the 100,000 barrels, the price of the aviation fuel had risen to P58 perbarrel. How much should be recognized as gain on purchase commitment for the year 2021? The following information has been extracted from the records of Marie Company about one of itsproducts:Units Unit Cost Total CostJan. 1 Beg. balance 10,000 150 P1,500,000Jan. 5 Purchase 10,000 180 1,800,000Jan. 15 Sale 15,000Jan. 16 Sales return 1,000Jan. 25 Purchase 4,000 200 800,000Jan. 26 Purchase return 500 200 100,000 Aditional questions: Under the FIFO, the cost of ending inventory and cost of goods sold should,…During 2021, Tartarus Company signed a noncancellable contract to purchase 500 sacks of rice at P900 per sack with delivery to be made in 2022. On December 31, 2021, the price of rice had fallen to P850 per sack. On May 9, 2022, Tartarus Company accepts delivery of rice when the price is P880 per sack. 54. In December 31, 2021 income statement, what amount of loss on purchase commitment should be recognized? A 15,000 B. 10,000 С. 25,000 D. 0 55. What amount of recovery of loss on purchase commitment should Tartarus recognize on May 9, 2022? A 10,000 B. 15,000 С. 25,000 D. 0 56. What amount of purchases should be recorded on May 9, 2022? C. 425,000 D. 480,000 A 450,000 B. 440,00031.. continue Marin, Inc. leases a piece of equipment to Bucks Company on January 1, 2020. The contract stipulates a lease term of 5 years, with equal annual rental payments of $7,367 at the end of each year. Ownership does not transfer at the end of the lease term, there is no bargain purchase option, and the asset is not of a specialized nature. The asset has a fair value of $40,000, a book value of $38,000, and a useful life of 8 years. At the end of the lease term, Marin expects the residual value of the asset to be $12,000, and this amount is guaranteed by a third party. Marin wants to earn a 6% return on the lease and collectibility of the lease payments is probable. Assume that the lease receivable is $40,000, deferred gross profit is $2,000, and the rate of return to amortize the net lease receivable to zero is 7.64%.Prepare Marin’ journal entry at the end of the first year of the lease to record the receipt of the first lease payment. (Credit account titles are automatically…
- On November 17, 2020, Thailand Airways entered in to a commitment to purchase 3,000barrels of aviation fuel for P9,000,000 on March 23, 2021. Thailand Airways entered into thispurchase commitment to protect itself against the volatility in the aviation fuel market.By December 31, 2020, the purchase price of aviation fuel had fallen to P2,200 perbarrel. However, by March 23, 2021, when Thailand Airways took delivery of the 3,000 barrels, the price of aviation fuel had risen to P2,500 per barrel. How much should be recognized asloss on purchase commitment on December 31, 2020? The answer is 2,400,000. Please help me find the solutions. Thank you.31..../// Partially correct answer icon Your answer is partially correct. Marin, Inc. leases a piece of equipment to Bucks Company on January 1, 2020. The contract stipulates a lease term of 5 years, with equal annual rental payments of $7,367 at the end of each year. Ownership does not transfer at the end of the lease term, there is no bargain purchase option, and the asset is not of a specialized nature. The asset has a fair value of $40,000, a book value of $38,000, and a useful life of 8 years. At the end of the lease term, Marin expects the residual value of the asset to be $12,000, and this amount is guaranteed by a third party. Marin wants to earn a 6% return on the lease and collectibility of the lease payments is probable. Assume that the lease receivable is $40,000, deferred gross profit is $2,000, and the rate of return to amortize the net lease receivable to zero is 7.64%.Prepare Marin’ journal entry at the end of the first year of the lease to record the receipt of…At December 31, 2021, ABC Company has an outstanding purchase commitment with contract purchase price of P 1,000,000 and the market value on this date is P 950,000 which is different from the expected market value of P 990,000. QUESTION: What is the amount of Loss on Purchase Commitment to be recorded at December 31, 2021?