Answered step by step

Verified Expert Solution

Link Copied!

Question

1 Approved Answer

Posted on Jun 18, 2024

On December 31, 2019, Merciful Company has outstanding purchases commitments for 100,000 gallons at P20 per gallon of raw material to be used in its

On December 31, 2019, Merciful Company has outstanding purchases commitments for 100,000 gallons at P20 per gallon of raw material to be used in its manufacturing process.The company prices its raw materials inventory at cost or market whichever is lower.

It is determined that the market price of the raw material has declined to P17 per gallon on December 31, 2019 and it is expected to decline further to P15 in the first quarter of 2020.

How much is the loss on purchase commitment that should be recognized in 2019?

Step by Step Solution

There are 3 Steps involved in it

Step: 1

Get Instant Access with AI-Powered Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

Step: 3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Operations Management

Authors: William J Stevenson

12th edition

2900078024107, 78024102, 978-0078024108

Students also viewed these Accounting questions

Question

★★★★★

White Floyd, Inc., a retail store, is concerned about the lack of control procedures over the recording of sales transactions. The company is concerned that the transactions might not be recorded...

Answered: 1 week ago

Question

★★★★★

LO.3 Determine the extent to which receipts can be excluded under the tax benefit rule.

Answered: 1 week ago

Question

★★★★★

What are the consequences when psychologists study a narrow slice of humanity, particularly those who live in countries that are W.E.I.R.D.?

Answered: 1 week ago

Question

★★★★★

Buchan's Junction Manufacturing Corporation uses a joint production process that produces three products at the split-off point. Joint production costs during March were $720,000. The company uses...

Answered: 1 week ago

Question

★★★★★

There are over 2,000 rows in column a, b, and c. I know it would be impossible to get the correct answers without having the excel file, but could you show what steps to go through in excel to get...

Answered: 1 week ago

Question

★★★★★

Good day tutor please help me explain Reference: https://www.chanrobles.com/republicactno7903.htm#.YekestXMJ0w In case of any conflict between the ZAMBOECOZONE Authority and the City of Zamboanga on...

Answered: 1 week ago

Question

★★★★★

ABC factory produces 24,000 units. The cost sheet gives the following information: Direct Materials Rs. 1,20,000 Direct Labour Rs. 84,000 Variable overheads Rs. 48,000 Semi variable overheads Rs....

Answered: 1 week ago

Question

★★★★★

Jayson Walker is a member of a consumer - driven health plan ( CDHP ) that is funded by a health savings account ( HSA ) established by his employer, Brock Industries. Brock's CDHP also uses a high -...

Answered: 1 week ago

Question

★★★★★

Part of Glo's strategic plan is to capture market segments that are traditionally underserved. Glo's management believes that the market for men's care products is underserved and would be an...

Answered: 1 week ago

Question

★★★★★

Michael is providing care to Anthea a Greek woman who has always attended a religious group. Anthea has been making large donations to the group. This group has strong right to life views and is...

Answered: 1 week ago

Question

★★★★★

A company uses Dynamics 365 Supply Chain Management for its warehouse operations. The company must put tolerances on over- and under-receiving of purchase order lines. The Landed cost module is not...

Answered: 1 week ago

Question

★★★★★

5) If an economy had production problems which led to inefficiency, but then solved these problems and increased economic efficiency, how would this be shown on a production possibility frontier? a)...

Answered: 1 week ago

Previous Question Next Question