In February 20X3, La Fondue Limited signed a two- year con-tract with a Quebec cheese supplier to provide a minimum of 1,500 kilograms of fine cheese for fondue at a fixed price of $ 20 per kilogram. By the end of October, La Fondue had purchased 650 kg at the agreed- upon price. In early November, however, the open market price of the cheese dropped to $ 17 per kg due to excess capacity in the dairy industry. On 18 November, La Fondue placed an order for 110 kg at the contract price of $ 20. The cheese is received on 27 November and full payment of $ 3,000 is made on 10 December.

Prepare any journal entries that are necessary on La Fondue’s books to record the events in November and December.

  • CreatedFebruary 17, 2015
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