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What is the gain on purchase commitment to be recognized

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On November 25, 2019, RT company entered into a commitment to purchase 10,000 units of product G on February 15, 2020 at a price of 310 per unit.

On December 31, 2019, the market price of Product G is P270 per unit. on February 15, 2020 the market price of product G is P 300 per unit.

Problem 1: What is the loss on purchase commitment to be recognized on December 31, 2019?

Problem 2: What is the gain on purchase commitment to be recognized on February 15, 2020?

Problem 3: What amount should be debited to purchase on February 15, 2020?

Problem 4: What amount should be recognized as accounts payable on February 15, 2020?

Reference no: EM132740594

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