On December 15, 2020, Trim-Sails entered into a contract to sell inventory to Flush-with-Funds for...
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Accounting
On December 15, 2020, Trim-Sails entered into a contract to sell inventory to Flush-with-Funds for $600,000. In a separate contract entered into on the same day, Trim-Sails agreed to buy similar inventory from Flush-with-Funds on January 14, 2021 for $605,000. The financial year ends on December 31 for both companies.
REQUIRED:
1. Explain whether the two contracts should be treated as two contracts or one contract.
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