Answer:
Accrued Loss on Purchase Commitments $2,000,000
Explanation:
December 31, (recognition of loss on purchase commitments)
- Dr Loss on Purchase Commitments account 2,000,000
- Cr Accrued Loss on Purchase Commitments account 2,000,000
Since the price of raw materials lowered by 2,000,000, the company lost money on its purchase commitments:
Purchase commitments loss = contracted price - market value = $5,000,000 - $3,000,000 = $2,000,000
The loss on purchase commitments is an expense, and accrued loss on purchase commitments is a liability.
Strategically, a company may phase out or sell an SBU this is known as DIVESTMENT.
Divestment is the process of selling an asset to obtain financial goals. Divesting involves a company selling its assets to improve its value and obtain higher efficiency.
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<span>how much of their company's merchandise is being sold, how much of it has been damaged, how much has gone out of style or is out of season. Once the inventory is taken, Pristine products should be able to project how much product needs to be manufactured and sold going forward so that they do not work at a loss of profits.</span>
The answer would be:
the employees supervisor.
Hope this helps
