Prepare the journal entry to record the december

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Reference no: EM13999996

In November 2011, the Brunswick Company signed two purchase commitments. The first commitment requires Brunswick to purchase 10,000 units of inventory at $10 per unit by December 15, 2011. The second commitment requires the company to purchase 20,000 units of inventory at $11 per unit by March 15, 2012. Brunswick's fiscal year-end is December 31. The company uses a periodic inventory system. Both contracts were exercised on their expiration date.

Required:

1. Prepare the journal entry to record the December 15 purchase for cash assuming the following alternative unit market prices on that date:

a. $10.50
b. $ 9.50

2. Prepare any necessary adjusting entry at December 31, 2011, for the second purchase commitment assuming the following alternative unit market prices on that date:

a. $12.50
b. $10.30

3. Assuming that the unit market price on December 31 was $10.30, prepare the journal entry to record the purchase on March 15, 2010, assuming the following alternative unit market prices on that date:

a. $11.50
b. $10.00 

Reference no: EM13999996

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