In March 2018, the Phillips Tool Company signed two purchase commitments. The first commitment requires Phillips to
Question:
The first commitment is exercised on June 15, 2018, when the market price of the inventory purchased was $85,000. The second commitment was exercised on August 20, 2018, when the market price of the inventory purchased was $120,000.
Required:
Prepare the journal entries required on June 15, June 30, and August 20, 2018, to account for the two purchase commitments. Assume that the market price of the inventory related to the outstanding purchase commitment was $140,000 at June 30.
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Related Book For
Intermediate Accounting
ISBN: 9781259722660
9th Edition
Authors: J. David Spiceland, James Sepe, Mark Nelson, Wayne Thomas
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