Prater Company has had difficulty obtaining key raw materials for its manufacturing process. The company therefore signed
Question:
Prater Company has had 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, 2022, at an agreed price of $400,000. At December 31, 2022, the raw material had declined in price to $375,000.
Instructions
What entry would you make on December 31, 2022, to recognize these facts?
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Step by Step Answer:
On December 31 2022 Prater Company should record the longterm purchase commitment as a liability a...View the full answer
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Related Book For 
Intermediate Accounting IFRS
ISBN: 9781119607519
4th Edition
Authors: Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield
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