Sarasota Company has been having difficulty obtaining key raw materials for its manufacturing process. The company...

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Sarasota Company has been having 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, 2025, at an agreed price of $400,000. At December 31, 2025, the raw material had declined in price to $367,500. What entry would you make on December 31, 2025, to recognize these facts? (List all debit entries before credit entries. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No entry" for the account titles and enter O for the amounts.) Sarasota Company has been having 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, 2025, at an agreed price of $400,000. At December 31, 2025, the raw material had declined in price to $367,500. What entry would you make on December 31, 2025, to recognize these facts? (List all debit entries before credit entries. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No entry" for the account titles and enter O for the amounts.)

Answer rating: 100% (QA)

Answer To recognize the facts related to the longterm noncancelable purchase commitment with the sup... View the full answer