Show necessary journal entries for diamond from sept

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Problem 1: Assume that a walnut farmer supplies 100,000 pounds of Walnuts to Diamond on Sept 15, 2010 (the Fall 2010 crop season) when Diamond's estimated price is $0.80/pound. Diamond agrees to pay (and pays) 35% of the estimated price on Oct 15, 2010, 50% of the estimated price on Feb 15, 2011, and the balance on Aug 15, 2011. On Apr 15, 2011 Diamond estimates (but does not announce to farmers) the final purchase price for the Fall 2010 crop to be $1.00 per pound. Assume that by 7/31/2011 (end of FY2011), Diamond sold 80% of the walnuts purchased at a selling price of $2.00/pound. Show necessary journal entries for Diamond from Sept 15, 2010 through Aug 15, 2011 (including adjusting entries on 7/31/2011). [Debit the Purchases account at the time of purchase. Omit closing entries.]

Reference no: EM132805494

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