Question: On January 2, Otto Corp. entered into a purchase commitment to buy 1,000 units of raw materials for $25 per unit. On January 31, the

On January 2, Otto Corp. entered into a purchase commitment to buy 1,000 units of raw materials for $25 per unit. On January 31, the company purchased 1,000 units when the market price was $24 per unit. Otto should recognize


 neither a gain nor loss. 


a gain of $1,000. 


a loss of $1,000.


none of these




Step by Step Solution

★★★★★

3.42 Rating (155 Votes )

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock

The detailed answer for the above question is provided below Otto Corp should recognize neither a ga... View full answer

blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Accounting Questions!

Q:

A large chemical manufacturing company is considering an electric power plant project in order to save on their electric power consumption by generating its own power supply. At present, the company...

Q:

Due to the multiple issues which have lead to cattle ranchers to shrink their herd sizes, the price of beef has went up by 20% since 2020. The higher costs of raising cattle, alongside the reduced...

Q:

Hi, can someone help with question 2 and 3 please? Thank you Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10- K (Mark one) ANNUAL REPORT PURSUANT TO...

Q:

Hi, can someone help with question 2 and 3 please? Thank you Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10- K (Mark one) ANNUAL REPORT PURSUANT TO...

Q:

hello tutors can someone help with question 2 and 3 please? Thank you Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10- K (Mark one) ANNUAL REPORT...

Q:

hello tutors can someone help with question 2 and 3 please? Thank you Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10- K (Mark one) ANNUAL REPORT...

Q:

hello tutors can someone help with question 2 and 3 please? Thank you Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10- K (Mark one) ANNUAL REPORT...

Q:

Read the case study "Southwest Airlines," found in Part 2 of your textbook. Review the "Guide to Case Analysis" found on pp. CA1 - CA11 of your textbook. (This guide follows the last case in the...

Q:

if some one would be able to help me describe Hisco's company using the Strengths, Weaknesses, Opportunities, and Threats (SWOT Analysis) based on the information provided. Also,what the best...

Q:

For each of the following scenarios, indicate whether an asset has been impaired (Y for yes and N for no) and, if so, the amount of loss that should berecorded. Book Value Fair Value Is Asset...

Q:

Which of the following statements is not true about cervical cancer screening guidelines according to WHO? a) Pap smear should be repeated yearly in women of reproductive age group b) HPV test should...

Q:

Find f ' ( x ) using the rules for finding derivatives. f ( x ) = 4 x - 3 x - 3 f ' ( x ) =

Q:

A partial summary of the payroll data for Long Industries for each week of June is as follows: a. Compute the missing amounts in the summary, assuming that no employees have reached the $120,000 FICA...

Q:

Dartmouth Games reported the following information for a three-year period: ____________________ _2014 2013 2012 Ending inventory ..$ 20,000$ 30,000..$ 34,000 Sales... 125,000.128,000...115,000 Cost...

Q:

PowerTap Utilities is planning to issue bonds with a face value of $1,000,000 and a coupon rate of 10 percent. The bonds mature in 10 years and pay interest semiannually every June 30 and December...

Q:

Match each of the following statements with the appropriate accounting concept. Some concepts may be used more than once, while others may not be used at all. Use the notations shown to indicate the...

Q:

RKO Company sold bonds with a face value of $850,000 for $910,000. The bonds have a coupon rate of 8 percent, mature in 10 years, and pay interest annually every December 31. All of the bonds were...

Q:

Which of the following is true of the Malcolm Baldrige National Quality Award?Question 5 options:a) The award is valid for 3years and is renewable upon a quality audit.b) It is not given for specific...

Q:

BellSouth Corporation invested in two wireless communications operations in Brazil in the mid-1990s that it accounted for under the equity method. The following note is taken from BellSouth...

Q:

When a partner sells an ownership interest in a partnership, what rights are conveyed to the new owner?

Q:

If a partner is contributing attributes to a partnership such as an established clientele or a particular expertise, what two methods can be used to record the contribution? Describe each method.

Q:

9. Describe tasks that people with Williams syndrome do poorly and those that they do well

Q:

11. What is the strongest evidence in favor of a sensitive period for language learning?

Q:

5. Which hemisphere is dominant for each of the following in most people: speech, emotional infl ection of speech, interpreting other peoples emotional expressions, spatial relationships, perceiving...