During 2020, ABC Company signed a non-cancelable contract with XYZ Company to purchase 5,000 units of goods at P 1,500 per unit with delivery to be made in 2021. On December 31,2020, the price had fallen to P 1,450 per unit. On March 1,2021, the price per unit further decreased to P 1,350. What is the amount of loss on purchase commitments recognized upon delivery of the 1,000 sacks on March 1,2021? a. P 50 b. P 750,000 c. P 250,000 d. P 500,000
Q: The accountant who posted the sale is now worried that they treated this incorrectly. They come to…
A: Revenue recognition refers to the timing and amount of the revenue that is to be recorded in the…
Q: dollars (b) Compute the profit for the consignor for the units sold. Profit on consignment sales…
A: Given information is: On May 3, 2020, Tamarisk Company consigned 80 freezers, costing $490 each, to…
Q: into a contract with Benton Corp. to sell it $25,000 of goods. Aiken will deliver the goods on…
A: The journal entry is prepared to keep the record of day to day transactions of the business.
Q: On January 1, 2021, VVV Shop received from ABC 300 pieces of bread toasters. VVV was to sell these…
A: Consignment Account In the consignment account consignor send the goods to the consignee in a…
Q: On August 5, 2021, Sheridan Furniture shipped 40 dining sets on consignment to Furniture Outlet,…
A: In case of consignment sales, one party consignor consigns or issues goods to another party…
Q: On March 1, 2020, Parnevik Company sold goods to Goosen Inc. for $660,000 in exchange for a 5-year,…
A: Prepare the journal entries for Parnevik on March 1, 2020:
Q: August 2021, Commonlo Corp. commits to selling 100 of its merchandise to M&H Co. for P30,000 (P300…
A: As per IAS 15 Revenue recognition When distinct goods or services are provided at standalone…
Q: Yellow Company, a distributor of machinery, bought a machine from the manufacturer in November 2020…
A: Sale on Approval is a business arrangement wherein an individual or company who is interested in…
Q: On May 3, 2020, Ayayai Company consigned 90 freezers, costing $480 each, to Remmers Company. The…
A: Consignment means where consignor send goods to consignee to be sold by later on the behalf of…
Q: Sheridan Company sells goods that cost $320,000 to Ricard Company for $403,500 on January 2, 2020.…
A: a. Date Account title and explanation Debit ($) Credit ($) January 2,2020 Accounts receivable…
Q: During August 5, 2020, Hiro marketing sold an item worth P 500,000 for P 750,000. The required down…
A: Accounting's goals include keeping a systematic record of all financial transactions in a book of…
Q: 58. During 2021, Tartarus Company signed a noncancellable contract to purchase 500 sacks of rice at…
A: Purchase commitment is a form of agreement or contract with company and their suppliers, which says…
Q: Indicate the income statement and balance sheet reporting by Pronghorn at October 31, 2020, of the…
A: Sales returns and allowances means value of goods that are being returned by customer or allowance…
Q: (a) Prepare the journal entries (if any) to record the sale on January 2, 2020. (Credit account…
A: Journal entries refers to the official book of a company which is used to record the day to day…
Q: On August 1, 2019, Aiken Corp. enters into a contract with Benton Corp. to sell it $25,000 of goods.…
A: Contracts are promises that the law will enforce. Contracts arise when a duty comes into existence,…
Q: During 2019, the Mitt Co. signed a non-cancellable contract to purchase 2,000 units of a raw…
A: In the given case the amount of 2000 units*P6=P12000 shall be loss on account of such non…
Q: During 2015, AD Company signed a non-cancelable contract with BARD Company to purchase 5,000,…
A: Units purchased=5,000 Price=P1,700 Price fallen to=P1,680 Further decrease=P1,540
Q: On December 1, 2021, ABC Department Store received 505 sweaters on consignment from Todd. Todd's…
A: In a consignment, goods are transferred to another party (the consignee), who acts as an agent for…
Q: On 1 July 2019, Entity A entered into the Contract X with a customer, Entity B, to sell Product A…
A: Date Particulars Amount Amount 1 July No Entry 30 September Payable A/c To Revenue…
Q: During 2021, Tartarus Company signed a noncancellable contract to purchase 500 sacks of rice at P900…
A: Answer with explanation are as follows.
Q: On October 2, 2020, Ivanhoe Company sold $5,630 of its elite camping gear (with a cost of $3,320) to…
A: Sales Agreement: An contract of sale specifies the terms and conditions under which the seller will…
Q: On May 3, 2020, Sage Company consigned 80 freezers, costing $ 500 each, to Remmers Company. The cost…
A: A business arrangement involving sale of goods by a third party vendor who charges a certain…
Q: Commando Corp. agrees to sell 100 of its products to M&H Co. for P30,000 in August 2021. (P300 per…
A: The original sale price of the products sold prior to alteration will not be modified. As previously…
Q: During 2020, Leni Robredo entered in a non-cancellable commitment to purchase 320,000 units of…
A: As per IAS 2 , Inventory is to be measured at lower of cost or Net realizable value. Further…
Q: On January 2, 2020, Adani Inc. sells goods to Geo Company in exchange for a zero-interest-bearing…
A: Note receivable refers to the promise to receive amount of money on some day in future. It shows the…
Q: On 1 January 2020, Entity A sold 100 units of Product X to Entity B for $220 per unit payable on 31…
A: The core principle of IFRS 15 is that an entity recognizes revenue:(a) to depict the transfer of…
Q: On October 1,2018, Bane Company entered into a 6-month, 5,200,000 purchase commitment for a supply…
A: Purchase commitment is the situation, when a buyer of a firm commit to buy from the particular…
Q: Late in December 2021, XYZ Corp. (XYZ), a publicly traded company, completed the manufacture of 600…
A: Journal entry A journal entry refers to the recording of the transactions in the books of accounts.…
Q: On January 1, 2021, VVV Shop received from ABC 300 pieces of bread toasters. VVV was to sell these…
A:
Q: On August, 2019, KBO consigned to UFO 10 laptops costing P15,000 each, paying freight charge c…
A: Given, Purchase price is P15,000 Selling price is P30,000 Commission is 20% on sale price Freight…
Q: During 2019, Boge Corporation signed a noncancelable contract to purchase 10,000 bushels of soybeans…
A: Every business should be documented in at least two locations, according to the logic of a journal…
Q: Ivanhoe Company sells on credits goods that cost $304,500 to Ricard Company for $418,500 on January…
A: Journal entry is a process of recording the business transactions in the books of accounts for the…
Q: During 2016, Palazzo Company signed a non-cancelable contract with Crown Milling Company to purchase…
A: Non-cancelable contracts are ones that cannot be modified or refused, and the terms and conditions…
Q: On October 10, 2020, Flounder Co. entered into a contract with Belisle Inc. to transfer Flounder’s…
A: Journal Entries in the Books of Flounder Co. for the Year 2020 15th Dec. 2020 Belisle Inc.…
Q: Omicron plc prepares financial statements to 31 December each year. On 1 January 2021, Omicron plc…
A: Here discuss about the details of the contract which are made by the company to sell the product…
Q: n August 2021, Commonlo Corp. commits to selling 100 of its merchandise to M&H Co. for P30,000 (P300…
A: As per IAS 15 Revenue recognition the contract modification will be treated as part of existing…
Q: Shaw Company sells goods that cost $300,000 to Ricard Company for $410,000 on January 2, 2020. The…
A: a. Date Account Titles and Explanation Debit Credit January 2, 2020 Accounts…
Q: On October 10, 2020, Executor Co. entered into a contract with Belisle Inc. to transfer Executor's…
A: Journal entries are the transactions that are recorded in the primary book. They are chronological…
Q: On January 2, 2020, Tamarisk Inc. sells goods to Carla Vista Company in exchange for a…
A: Interest = Face value of bonds - Fair value of goods = $7,920 - $7,200 = $720
Q: At December 31, 2020, Ashley Co. has outstanding purchase commitments for 150,000 gallons, at $6.20…
A:
Q: During 2021, Tartarus Company signed a noncancellable contract to purchase 500 sacks of rice at P900…
A: Recovery of loss on purchase commitment per sack = Price per sack on May 9, 2022 - Price per sack on…
Q: ABC Company sold 10 units of goods with a unit list price of P2,000 on January 1, 2020. Given that…
A: The period given to avail cash discount is 10 days. Thus 10 days is expired on January 10th. Thus…
Q: August 2021, Commonlo Corp. commits to selling 100 of its merchandise to M&H Co. for P30,000 (P300…
A: As per IAS 15 Revenue recognition if additional contract is an prospective modification to the…
Q: During 2021, Tartarus Company signed a noncancellable contract to purchase 500 sacks of rice at P900…
A: Solution: Amount of loss on purchase commitment should be recognized on Dec 31, 2021 = (contract…
Q: Dowell Fishing Supply, Inc., sold $50,000 of Dowell Rods on December 15, 2021, to Bassadrome.…
A: Bill and hold sales recognize revenue: Customer use to purchase goods and requests the seller to…
Q: On June 1, 2020, Mylene Company sells a new car costing P1,620,000 for P2,268,000. A used car is…
A: Gross profit refers to the profit which is earned by the company after deducting all it’s production…
Q: During 2021, Tartarus Company signed a noncancellable contract to purchase 500 sacks of rice at P900…
A: Recovery of loss on purchase commitment = (P880-P850) x 500 sacks = P30 x 500 = P15,000
Q: During 2020, Univ Company signed a non-cancellable contract with Univy to purchase 1,000 tons of…
A: Here in this question we are required to determine how much gain from recovery of loss needs to…
Q: On October 6, 2021, the Elgin Corporation signed a purchase commitment to purchase inventory for…
A:
Q: Commando Corp. agrees to sell 100 of its products to M&H Co. for P30,000 in August 2021. (P300 per…
A: The original sale price of the products before alteration will not be modified. As previously…
Step by step
Solved in 2 steps
- On January 1, 2019, Piper Company entered into an agreement with Save-Mart to sell its most popular product, the gadget. The contract stipulates that the price per unit will decrease as Save-Mart purchases higher volumes of the gadget, as follows: The contract states that Save-Mart pays Piper the unit price based on the current sales volume. Once a volume threshold is reached, the price is retroactively reduced to the applicable price per unit. Based on its past experience with similar contracts, Piper believes that the total sales volume for the year will be 1,800 units and uses the most likely amount approach to estimate variable consideration. In addition, Piper concludes it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur once the uncertainty surrounding the variable consideration is resolved. Required: 1. Determine the transaction price per unit that Piper should use to record revenue. 2. Assume that Save-Mart purchases 800 units in the first quarter of 2019 and 900 units in the second quarter of 2019. Prepare Pipers journal entries to record the sales in the first and second quarters. 3. Given the higher than expected sales volume in the first half of the year, Piper increases its estimate of the sales volume to 2,800 units. Prepare the journal entry to record this change in estimate.Heller Company began operations in 2019 and used the LIFO method to compute its 300,000 cost of goods sold for that year. At the beginning of 2020, Heller changed to the FIFO method. Heller determined that its cost of goods sold under FIFO would have been 250,000 in 2019. For 2020, Hellers cost of goods sold under FIFO was 360,000, while it would have been 410,000 under LIFO. Heller is subject to a 21% income tax rate. Compute the cumulative effect of the retrospective adjustment on prior years income (net of taxes) that Heller would report on its retained earnings statement for 2020.During 2020, ABC Company signed a non-cancelable contract with XYZ Company to purchase 5,000 units of goods at P 1,500 per unit with delivery to be made in 2021. On December 31,2020, the price had fallen to P 1,450 per unit. On March 1,2021, the price per unit further decreased to P 1,350. What is the amount of loss on purchase commitments recognized upon delivery of the 1,000 sacks on March 1,2021? P 750,000 P 250,000 P 500,000 P 50
- During 2020, ABC Company signed a non-cancelable contract with XYZ Company to purchase 5,000 units of goods at P 1,500 per unit with delivery to be made in 2021. On December 31,2020, the price had fallen to P 1,450 per unit. On March 1,2021, the price per unit further decreased to P 1,350. What is the amount of loss on purchase commitments recognized upon delivery of the 1,000 sacks on March 1,2021?Required to answer. Single choice.During 2020, ABC Company signed a non-cancelable contract with XYZ Company to purchase 5,000 units of goods at P 1,500 per unit with delivery to be made in 2021. On December 31,2020, the price had fallen to P 1,450 per unit. On March 1,2021, the price per unit further decreased to P 1,350. What is the amount of loss on purchase commitments recognized upon delivery of the 1,000 sacks on March 1,2021?During 2020, BIOT Company signed a non-cancelable contract with BTS Company to purchase 5,000 units of goods at P 1,500 per unit with delivery to be made in 2021. On December 31,2020, the price had fallen to P 1,450 per unit. On March 1,2021, the price per unit further decreased to P 1,350. What is the amount of loss on purchase commitments recognized upon delivery of the 1,000 sacks on March 1,2021?
- 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. 440,000On October 1, 2020, Win Company consigned 240 posters to JAA Inc. with original cost of P1,000 each. Win policy in setting its selling price is 160% mark-up on cost. Freight on shipment was paid by JAA Company for P12,000. Any costs incurred by the consignee in relation to the consigned goods are all reimbursable. On December 17, JAA Inc. submitted an account sales and remitted P230,400 after deducting 12% commissions, selling expense of P10,000 and any reimbursable cost. Assume further that 50% of the remaining posters were returned to Win incurring freight of P5,000. Half of the returned goods were lost during the shipment. How much is the total loss and/or expenses accounted by Win in relation to the consignment other than the Cost of Goods Sold? Determine the cost of ending inventoryOn October 1, 2020, Win Company consigned 240 posters to JAA Inc. with original cost of P1,000 each. Win policy in setting its selling price is 160% mark-up on cost. Freight on shipment was paid by JAA Company for P12,000. Any costs incurred by the consignee in relation to the consigned goods are all reimbursable. On December 17, JAA Inc. submitted an account sales and remitted P230,400 after deducting 12% commissions, selling expense of P10,000 and any reimbursable cost. How much is the net income?
- During 2019, the Mitt Co. signed a non-cancellable contract to purchase 2,000 units of a raw material at P 32 per pound. On December 31, 2019, the market price of the raw material is P 26 per unit, and the selling price of the finished product is expected to decline accordingly.The financial statement prepared for 2019 should report a. A loss of P 12,000 in the statement of comprehensive income. b. An appropriation of retained earnings for P 12,000. c. Nothing regarding this matter. d. A note describing the expected loss on the purchase commitment.During 2020, Univ Company signed a non-cancellable contract with Univy to purchase 1,000 tons of cotton at P1, 200 with delivery to be made in 2021. On December 31, 2020, the price of cotton had fallen for P1,150 per ton. The company expects delivery of cotton when the price is P1,180 per ton on April 2021. What amount of gain from recovery of loss on purchase commitment, if any, should be recognized by Univ in 2021?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. What amount of purchases should be recorded on May 9, 2022?