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commitment with its largest supplier of this raw material on November 30, 2014, at an agreed...
Flounder Company has been having difficulty obtaining key raw materials for its manufacturing process. The company...
Flounder Company has been having difficulty obtaining key raw
materials for its manufacturing process. The company therefore
signed a long-term noncancelable purchase commitment with its
largest supplier of this raw material on November 30, 2020, at an
agreed price of $430,400. At December 31, 2020, the raw material
had declined in price to $394,050.
What entry would you make on December 31, 2020, to recognize these
facts? (Credit account titles are automatically
indented when amount is entered. Do not indent...
Windsor Company signed a long-term noncancelable purchase commitment with a major supplier to purchase raw materials...
Windsor Company signed a long-term noncancelable purchase commitment with a major supplier to purchase raw materials in 2021 at a cost of $981,000. At December 31, 2021, the raw materials to be purchased have a market value of $932,500. Prepare any necessary December 31, 2021 entry. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No entry" for the account titles and enter O for the amounts.) Account Titles...
Spitz Company ordered merchandise from a foreign supplier on November 20 at a price of 101,000...
Spitz Company ordered merchandise from a foreign supplier on November 20 at a price of 101,000 forints when the spot rate was $0.51 per forint Delivery and payment were scheduled for December 20. On November 20, Spitz acquired a call option on 101.000 forints at a strike price of $0.51. paying a premium of $0.02 per forint. It designates the option as a fair value hedge of a foreign currency firm commitment. The fair value of the firm commitment is...
Spitz Company ordered merchandise from a foreign supplier on November 20 at a price of 120,000...
Spitz Company ordered merchandise from a foreign supplier on November 20 at a price of 120,000 forints when the spot rate was $0.29 per forint. Delivery and payment were scheduled for December 20. On November 20, Spitz acquired a call option on 120,000 forints at a strike price of $0.29, paying a premium of $0.02 per forint. It designates the option as a fair value hedge of a foreign currency firm commitment. The fair value of the firm commitment is...
Spitz Company ordered merchandise from a foreign supplier on November 20 at a price of 112,000...
Spitz Company ordered merchandise from a foreign supplier on November 20 at a price of 112,000 forints when the spot rate was $0.21 per forint. Delivery and payment were scheduled for December 20. On November 20, Spitz acquired a call option on 112,000 forints at a strike price of $0.21, paying a premium of $0.02 per forint. It designates the option as a fair value hedge of a foreign currency firm commitment. The fair value of the firm commitment is...
Apple Company was incorporated in Delaware in 2012. On November 2, 2014, the controller of the...
Apple Company was incorporated in Delaware in 2012. On November 2, 2014, the controller of the companyentered into a forward contract to sell 50,000 British pounds for $1.5920 on March 1, 2015. The followingexchange rates were quoted on the indicated dates: Spot Rate Forward Rate March 1 Delivery November 2, 2014 $1.6021 1.5920 December 31, 2014 1.5820 1.58 March 1, 2015 1.6543 Apple Company’s fiscal year-end is December 31. Required: A.Assume that the forward contract was entered into as a...
Silverado Inc. buys titanium from a supplier that requires a six-month firm commitment on all pur...
Silverado Inc. buys titanium from a supplier that requires a six-month firm commitment on all purchases. On January 1, 2011, Silverado signs a contract with the supplier to purchase 10,000 pounds of titanium at the current forward rate of $310 per pound with settlement on June 30, 2011. However, Silverado wants to actually pay the June 30 market price for titanium. To achieve this goal, the company enters into a forward contract to sell 10,000 pounds of titanium at the...
A manufacturer purchases the required raw material from an outside supplier. The company uses raw material...
A manufacturer purchases the required raw material from an outside supplier. The company uses raw material at a relatively steady rate of 100 units per month and uses a 22 percent annual interest rate to compute holding costs According to the agreement between the manufacturer and the supplier the discount is applied to all unites in the order based on the following three offers. Order size Price per unit OsQ<600 310 600 SQ< 1,200 58 1,200 SQ 56 Assume that...
On November 30, 2020, a U.S. company purchased merchandise on credit from a Swiss supplier at...
On November 30, 2020, a U.S. company purchased merchandise on credit from a Swiss supplier at an invoice price of CHF1,000, when the exchange rate was $1.05/CHF. On December 31, 2020, the company's year-end, the exchange rate was $1.045/CHF. On February 1, 2021, the company purchased the CHF1,000 for $1.048/CHF and paid the invoice. On March 15, 2021, when the exchange rate was $1.044, the company sold the merchandise to a U.S. customer for $2,000. At what amount should the...
Brief Exercise 9-08 Sunland Company signed a long-term noncancelable purchase commitment with a major supplier to...
Brief Exercise 9-08 Sunland Company signed a long-term noncancelable purchase commitment with a major supplier to purchase raw materials in 2021 at a cost of $919,600. At December 31, 2020, the raw materials to be purchased have a market value of $869,100. In 2021, Sunland paid $919,600 to obtain the raw materials which were worth $869,100. Prepare the entry to record the purchase. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry...
Flounder Company has been having difficulty obtaining key raw
materials for its manufacturing process. The company therefore
signed a long-term noncancelable purchase commitment with its
largest supplier of this raw material on November 30, 2020, at an
agreed price of $430,400. At December 31, 2020, the raw material
had declined in price to $394,050.
What entry would you make on December 31, 2020, to recognize these
facts? (Credit account titles are automatically
indented when amount is entered. Do not indent...
Windsor Company signed a long-term noncancelable purchase commitment with a major supplier to purchase raw materials in 2021 at a cost of $981,000. At December 31, 2021, the raw materials to be purchased have a market value of $932,500. Prepare any necessary December 31, 2021 entry. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No entry" for the account titles and enter O for the amounts.) Account Titles...
Spitz Company ordered merchandise from a foreign supplier on November 20 at a price of 101,000 forints when the spot rate was $0.51 per forint Delivery and payment were scheduled for December 20. On November 20, Spitz acquired a call option on 101.000 forints at a strike price of $0.51. paying a premium of $0.02 per forint. It designates the option as a fair value hedge of a foreign currency firm commitment. The fair value of the firm commitment is...
Spitz Company ordered merchandise from a foreign supplier on November 20 at a price of 112,000 forints when the spot rate was $0.21 per forint. Delivery and payment were scheduled for December 20. On November 20, Spitz acquired a call option on 112,000 forints at a strike price of $0.21, paying a premium of $0.02 per forint. It designates the option as a fair value hedge of a foreign currency firm commitment. The fair value of the firm commitment is...
Silverado Inc. buys titanium from a supplier that requires a six-month firm commitment on all purchases. On January 1, 2011, Silverado signs a contract with the supplier to purchase 10,000 pounds of titanium at the current forward rate of $310 per pound with settlement on June 30, 2011. However, Silverado wants to actually pay the June 30 market price for titanium. To achieve this goal, the company enters into a forward contract to sell 10,000 pounds of titanium at the...
A manufacturer purchases the required raw material from an outside supplier. The company uses raw material at a relatively steady rate of 100 units per month and uses a 22 percent annual interest rate to compute holding costs According to the agreement between the manufacturer and the supplier the discount is applied to all unites in the order based on the following three offers. Order size Price per unit OsQ<600 310 600 SQ< 1,200 58 1,200 SQ 56 Assume that...
Brief Exercise 9-08 Sunland Company signed a long-term noncancelable purchase commitment with a major supplier to purchase raw materials in 2021 at a cost of $919,600. At December 31, 2020, the raw materials to be purchased have a market value of $869,100. In 2021, Sunland paid $919,600 to obtain the raw materials which were worth $869,100. Prepare the entry to record the purchase. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry...
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