Company S signs several purchase contracts in Under the terms of one contract, Company S will take delivery of the inventory,
sold on account, in and pay a price of $ to Company R The fair value of the inventory at the company's December
year end declines to $ Company does not expect to be able to recover its additional costs. Assume that the fair value
remains at $ until the goods are delivered.
Is this an onerous contract in If so why? Show journal entries for and 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 for the amounts.
List all debit entries before credit entries.
Account Titles
Debit
Credit
Loss on Purchase Contracts
Liability for Onerous Contracts
