At the End of the Fiscal Year, Apha Airlines Has

question 47

Multiple Choice

At the end of the fiscal year, Apha Airlines has an outstanding purchase commitment for the purchase of 1 million gallons of jet fuel at a price of $4.60 per gallon for delivery during the coming summer. The company prices its inventory at the lower of cost or market. If the market price for jet fuel at the end of the year is $4.25, how would this situation be reflected in the annual financial statements?

• A) Record unrealized gains of $350,000 and disclose the existence of the purchase commitment.
• B) No impact.
• C) Record unrealized losses of $350,000 and disclose the existence of the purchase commitment.
• D) Only disclose the existence of the purchase commitment.

---

Definitions:

Second Grade

A stage in primary education where students are typically 7-8 years old, focusing on developing basic math, reading, and writing skills.

Third Grade

An educational level where students are typically 8 to 9 years old, focusing on developing reading, writing, and basic math skills.

Adolescent Growth Spurt

A rapid and intense period of physical growth that typically occurs during puberty.

Myopia

A common vision condition in which close objects appear clearly, but distant ones don't.