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Situation 1 On November 1, 2020, another entity entered into a noncancelable commitment to purchase 100,000 barrels of aviation fuel for P50 per barrel on
Situation 1 On November 1, 2020, another entity entered into a noncancelable commitment to purchase 100,000 barrels of aviation fuel for P50 per barrel on March 31, 2021. The entity 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 P43 per barrel. However, by March 31, 2021, when the entity took delivery of the 100,000 barrels the price of aviation fuel had risen to P55 per barrel. Situation 2 On January 1, another entry has 3-year old cows measured at fair value less cost of disposal of P2,500,000. On September 1, additional cows aged at 3 years old and 8 months were purchased for P500,000. On October 1, there were newborn cows valued at P200,000. There were no disposals nor death of cows during the year. Below are the following total fair value less cost of disposal: 3-year old on January 1 2,500,000 4-year old on December 31 3,500,000 3-year old on December 31 3,000,000 New born on October 1 200,000 3-year and 8-month old on September 1 500,000 New born on December 31 300,000 3-year and 8-month old on December 31 700,000 3-month old on December 31 450,000
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