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
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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?
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- 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.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 030.000EOn 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?
- 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…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,…
- 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?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…
- 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?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.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 recovery of loss on purchase commitment should Tartarus recognize on May 9, 2022
