Question: Bonita Company signed a long-term noncancelable purchase commitment with a major supplier to purchase raw materials in 2021 at a cost of $939,400. At December

Bonita Company signed a long-term noncancelable purchase commitment with a major supplier to purchase raw materials in 2021 at a cost of $939,400. At December 31, 2020, the raw materials to be purchased have a market value of 891,000. In 2021. Bonita paid $939,400 to obtain the raw materials which were worth $891,000. Bonita uses a periodic inventory system.

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