Question 1 Swifty Corp., a public company using IFRS, signed a long-term non-can

Question

Question 1 Swifty Corp., a public company using IFRS, signed a long-term non-cancellable purchase commitment with a major supplier to purchase raw materials at an annual cost of $1,700,000. At December 31, 2016, the raw materials to be purchased in 2017 have a market price of $1,462,000. Prepare any necessary December 31, 2016 entry. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) ate Account Titles and Explanation Debit Credit Dec. 31, 2016

Explanation / Answer

Date

Account Titles and Explanation

Debit

Credit

December 31, 2016

Unrealized holding gain or Loss-Income ($1,700,000-$1,462,000)

$ 238,000.00

Estimated Liability on Purchase Commitments

$ 238,000.00

Date

Account Titles and Explanation

Debit

Credit

December 31, 2016

Unrealized holding gain or Loss-Income ($1,700,000-$1,462,000)

$ 238,000.00

Estimated Liability on Purchase Commitments

$ 238,000.00

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