The following data is from Sonic Inc. Nov. 1, 2020 Sonic Inc. entered into a purchase...
The following data is from Sonic Inc.
Nov. 1, 2020
Sonic Inc. entered into a purchase contract (not subject to revision or cancellation) to purchase 36,000 units of inventory at $7 per unit (to be used in manufacturing). The contract period extends through February 2021, and Sonic applies a perpetual inventory system and the FIFO inventory method.
Dec. 31, 2020
At Sonic’s December 31 year-end, inventory was being sold at a price of $5 per unit.
Jan. 25, 2021
Sonic purchased the 36,000 units contracted; however, the selling price per unit of inventory on this date was $4.75.
Prepare any necessary journal entries or disclosures on the
following dates.
a. November 1, 2020 (initiation of contract).
b. December 31, 2020 (reporting period).
c. January 25, 2021 (purchase date).
- Note: The selling prices above are net of selling costs.
- Note: If a line in a journal entry isn't required for the transaction, select "N/A" as the account name and leaver the Dr. and Cr. answers blank (zero)
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The following data is from Sonic Inc.
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