What the company paid for the inventory at the date

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Problem 1: On june 16, 2020, company A entered into a noncancalable commitment to purchase 5,000 barrels of aviation fuel for 10,000,000 on january 6, 2021. By december 31, 2020 the pruchase price of aviation fuel had fallen down to 1600 per barrel by january 6, 2021 this price had risen to 2,300 per barrel. the company paid for the inventory at this date the company entries to record these transactions would not imclude

00001. on jnauary 6, 2021 a debit to inventory of 10,000,000
00002. on jnauary 6, 2021 a credit to gain on purchase commitment of 3,500,000
00003. on december 31, 2020 a debit to loss on purchase commitment of 2,000,000
00004. on jnauary 6, 2021 a debit to estimated liability on purchase commitment of 2,000,000

Reference no: EM132779798

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