1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
brilliants [131]
3 years ago
8

During the current year, the Guileman Manufacturing Company signed a noncancelable contract to purchase 1,000 lbs. of a raw mate

rial at $32 per lb. during the forthcoming year. On December 31, the market price of the raw material is $26 per lb., and the selling price of the finished product is expected to decline accordingly. The financial statements prepared for the year should report...A. An appropriation of retained earnings for $6,000.B. A loss of $6,000 in the income statement.C. Nothing regarding this matter.D. A note describing the expected loss on the purchase commitment.
Business
1 answer:
Dovator [93]3 years ago
5 0

Answer:

B) A loss of $6,000 in the income statement.

Explanation:

The appropriate journal entry should be:

December 31 (recognition of loss on purchase commitments)

  • Dr Loss on Purchase Commitments account 6,000
  • Cr Accrued Loss on Purchase Commitments account 6,000

Since the price of raw materials lowered by $6,000, the company lost money on its purchase commitments:

Purchase commitments loss = contracted price - market value = $32,000 - $26,000 = $6,000

The loss on purchase commitments is an expense, and accrued loss on purchase commitments is a liability.

You might be interested in
The expansionary phase of the business cycle is characterized by
Leokris [45]

Answer:

<u>increasing real output and reducing unemployment</u>

Explanation:

The expansionary phase of the cycle is business characterized by the i<em><u>ncreasing real output and reducing unemployment.</u></em>

<em> Business cycle refers to that cycle in which there is increase and decrease or fall and rise of output of goods and services.</em>

<em> Business cycle has main four stages expansion ,peak , contraction and trough.</em>

The main cause of business cycle is the forces of supply and demand , expectation of future and it availability of the capability may also cause the business cycle.

Economic cycle is another name of Business cycle . Business cycle plays a crucial rule in the economy as it influence the demand of the consumer.

4 0
2 years ago
The name for computations that allow you to determine how much money to deposit now to earn a desired amount in the future is
nydimaria [60]

Answer:

Future value

Explanation:

The name for computation that allows you to determine how much money to deposit now to earn a desired amount in the future is "Future value." Future value is the equivalent of an asset at a particular date. It estimates specific nominal future sum of cash that an invested sum of money is "worth" at a stipulated period in the future considering a specific interest rate, or more commonly, rate of interest; it is the immediate price multiplied by the aggregation function.

5 0
3 years ago
Bjorn felt that the focus groups did not give him enough quantitative information to make a decision, so he directed his manager
klio [65]

Answer:A

Explanation:

Veracity : This simply means conformity with truth or facts. Since Bjorn felt that the focus group did not give him fact, he would hereby, adopt veracity to achieve his secondary research.

4 0
3 years ago
What general conclusions can be drawn about Eli’s situation? Check all that apply.
Alex777 [14]

Answer:

He may still be covered in some cases.

He faces more risk than insured people do.

He may have to take precautions but many factors are beyond his control.

Not being able to afford insurance was a factor in him not being covered.

Explanation:

I got it correct

7 0
3 years ago
Read 2 more answers
5. Categorize each of the following funding schemes as examples of the benefits principle or the ability-to-pay principle. a. Vi
Simora [160]

Answer:

b, c and a

Explanation:

Ability to pay principle refers to an economic principle that states that the amount of tax an individual pays should be <u>dependent on the level of burden the tax will create relative to the wealth</u> of the individual.

Based on the above definition, the first category will be:

1. Local property taxes support elementary and secondary schools. <em>This tax will definitely generate the biggest tax burden of the 3 cases in the scenario.</em>

2. An airport trust fund collects a tax on each plane ticket sold and uses the money to improve airports and the air traffic control system. <em>Obviously this tax will be of a higher burden than paying national park entrance fees but will not be as heavy as local property taxes</em>

3. Visitors to many national parks pay an entrance fee. <em>Park entrance fees will be of the lightest burden of the three cases in the scenario.</em>

<em />

7 0
3 years ago
Other questions:
  • Hey guys its emogoth i needed to make a new one
    5·1 answer
  • A TAX ON PERFUME IS AN EXAMPLE OF AN. A. INCOME TAX. B. PROPERTY TAX. C.EXCISE TAX. D.STOCK TRANSFER TAX.
    7·1 answer
  • El Salvador has a population density of about 620 people per square mile and neighboring Honduras a population density of about
    10·1 answer
  • The financial perspective of the balanced scorecard is concerned with
    8·1 answer
  • Two important goals for any speech are:
    12·1 answer
  • Corporate-level managers use ______ to summarize sales by region, current inventory levels, and other company-wide metrics all i
    13·1 answer
  • A. Identify a profession b. In not more than 60 words, describe the "art" and "science" of such profession in (a).
    8·1 answer
  • What is the world's largest free trade area?
    14·2 answers
  • A customer buys 17. 01 in gas and requests one five dollar [$5] lottery ticket, two one dollar [$1] lottery tickets, and one [$3
    5·1 answer
  • Kathy Thompson has determined that the value of her assets is $64,000 and the value of her debts is $23,000. The difference betw
    13·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!