On December 31, 2019, Artemis Corporation signed a non-cancellable purchase commitment to buy 10,000 units of archery targets between 2020 and 2021. What must the company formally recognize in its balance sheet at the end of the year in which the contract was signed

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Answer:

Artemis Corporation doesn't have to recognize anything in its balance sheet. It hasn't purchased anything yet, until it does there's nothing to recognize.

When Artemis actually purchases a certain amount of archery targets, then it can record an increase in its assets (merchandise inventory), and either a decrease in cash or an increase in liabilities.