On February 1, 2014, Daily Produce Ltd. entered into a purchase commitment contract to buy apples from

Question:

On February 1, 2014, Daily Produce Ltd. entered into a purchase commitment contract to buy apples from Farmers Corporation. According to the contract, Daily Produce could settle the contact on a net basis; however, Daily Produce intends to take delivery of the apples so that they can be sold in its grocery stores. On April 1, 2014, Daily Produce takes delivery of the apples for cost of $1,000, and charges the amount on account.
(a) How should this be accounted for in Daily Produce's if it applies IFRS?
(b) How should this be accounted for in Daily Produce's if it applies ASPE?
(c) Explain which financial risks the transaction exposes the entity to.
Financial Statements
Financial statements are the standardized formats to present the financial information related to a business or an organization for its users. Financial statements contain the historical information as well as current period’s financial...