Compute for the gain or loss from the derivative contract. And Show Complete solution. The forward contract involves selling 1,000 shares at P300 each on the agreed date. The shares sell at P320 on said date
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Compute for the gain or loss from the derivative contract. And Show Complete solution.
- The forward contract involves selling 1,000 shares at P300 each on the agreed date. The shares sell at P320 on said date
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- Blossom Inc, purchases a call option contract on January 2, 2023, from Baird Investment Corp. The option gives Blossom the right to purchase 3,270 Laredo Corp. shares (the underlying) at $220 per share (the exercise/strike price), and it expires April 30, 2023. For the right to buy the shares at this fixed price, Blossom pays a premium of $880. This is a financial derivative because the underlying is anancial asset the Laredo shares.At the time of the transaction, Laredo shares are trading at $220. If the price of Laredo shares increases above $220, Blossom canexercise the option and purchase the shares for $220 per share. Alternatively. Blossom may sell the option to someone else.Prepare the related journal entry for Blossom at the acquisition date. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. List debit entry before credit entry. If no entry is required, select "No Entry"1,000 shares of Ayala Corp. Strike price is P300 per share. On the agreed date, the market value is P320 per share. How much is the gain/(loss) relating to the contract?On January 1, 2020, ABC Company purchased an equipment with a cash price of P2,000,000. The supplier can choose how the purchase is to be settled.The choices are 20,000 shares with par value of P50 in one year’s time, or a cash payment equal to the market value of 15,000 phantom shares on December 31, 2020. At grant date on January 1, 2020, the market price of each share is P80 and on the date of settlement on December 31, 2020, the market price of each share is P100.What is the equity component arising from the purchase of equipment with share and cash alternative? What amount of interest expense should be recognized on December 31, 2020 if the supplier has chosen the cash alternative?
- On January 1, 2020, Planet Company purchased an equipment with a cash price of P2,000,000. The supplier can choose how the purchase is to be settled. The choices are 20,000 shares with par value of P50 in one year's time, or a cash payment equal to the market value of 15,000 phantom shares on December 31, 2020. At grant date on January 1, 2020, the market price of each share is P80 and on the date of settlement on December 31, 2020, the market price of each share is P100. What is the equity component arising from the purchase of equipment with share and cash alternative?On January 1, 2020, Planet Company purchased an equipment with a cash price of P2,000,000. The supplier can choose how the purchase is to be settled. The choices are 20,000 shares with par value of P50 in one year's time, or a cash payment equal to the market value of 15,000 phantom shares on December 31, 2020. At grant date on January 1, 2020, the market price of each share is P80 and on the date of settlement on December 31, 2020, the market price of each share is P100. What amount should be recognized as share premium on December 31, 2020 if the supplier has chosen the share alternative?On January 1, 2020, Planet Company purchased an equipment with a cash price of P2,000,000. The supplier can choose how the purchase is to be settled. The choices are 20,000 shares with par value of P50 in one year's time, or a cash payment equal to the market value of 15,000 phantom shares on December 31, 2020. At grant date on January 1, 2020, the market price of each share is P80 and on the date of settlement on December 31, 2020, the market price of each share is P100. What amount of interest expense should be recognized on December 31, 2020 if the supplier has chosen the cash alternative?
- Holder Ltd. purchases an options contract from Issuer Ltd. that gives Holder Ltd. the right to acquire 100,000 options in Torquay Ltd. for a price (exercise price) of $ 10.00 per share. When the contract was exchanged the price of Torquay Ltd. shares was $ 9.00 each. The option entitles Holder Ltd. to exercise the options and buy the shares any time within the next six months. If the options are not exercised within the six month period, then the options will expire. Need the answers to the followings; Determine whether a financial liability or financial asset exists from the perspectives of Holder Ltd. and Issuer Ltd. Further, if the price of shares in Torquay Ltd. falls to $ 5.00, with the result that it is improbable that Holder Ltd. will ever exercise the options, will this change the classification of the options as either financial assets or financial liabilities?On April 1, 2023, Gamma Corp. purchases a call option for $500, which gives Gamma the right to buy 1,000 shares of Delta Inc. for $30 each until December 1, 2023. Delta Inc. shares are currently trading for $30. At June 30, 2023, the options are trading at $4,800 and the shares at $32 each. At December 1, 2023, the options expire with no value. The entry to record the purchase of the call option is: a. Derivatives-Financial Assets. Cash. 500 500 b. Cash. 500 Derivatives Financial Assets. 500 c. FV-NI Investments. Cash... 500 500 d. No entry required. Please dont provide solution image based thanxOn March 1, 2022, Jensen Corp. purchased a call option on shares of YTV stock. The contract was for 100 shares at a strike price of $120 per share, with an expiration date of May 31, 2022. The option contract premium was $30. On March 31, a market appraisal estimated the time value of the option to be $20. Jensen settled the option contract on May 10. Prices of YTV stock during the option period are provided below. March 1 March 31 May 10 Price of YTV stock: $120 $110 $115 At what amount would Jensen report as the value of the call option in its March 31, 2022 balance sheet? Call option account balance as off March 31 :
- ABC Company Ltd purchased 5000 cocoa futures contract at a price of $150per contract. As part of the contract, ABC was required to deposit $10 percontract initially in their account with the maintenance margin set at $5 percontract. If the price per contract falls to $142 overnight, what action will theexchange require ABC to undertake?On January 1, 2022, Rosewood Corp. purchased a put option on shares of ICM stock. Terms of the contract were as follows: Number of shares: 100 Strike price: $200 per share Expiration date: May 31, 2022 Total cost of the option contract: $80 Seller of the option contract: First Investment Bank On January 1, 2022, ICM stock was trading at $200 per share.The following additional information is known: On March 31, 2022, the price of ICM stock was $220 per share. A market appraisal indicated that the time value of the option contract was $60. On May 10, 2022, the price of ICM stock was $185 per share. A market appraisal indicated that the time value of the option contract was $50. On this date, Rosewood settled the option contract. What is the dollar value of put option that Rosewood Corp. would have included in its March 2022 quarterly financial statements?On January 1 of the current year, a call option was purchased by Beats Co. for $40 , which allows Beats Co. to purchase 50 shares of Bieber Inc. stock at a strike price of $25 per share through December 31 of the following year. On January 1, the fair value of the stock is $25 per share. On June 30, the fair value of each share of Bieber Inc. stock is $28 per share, and the fair value of the option is $190. Assuming that Beats Co. settles the call option on June 30, what is the gain or loss (if any) recorded on June 30? Assume that the call option was adjusted to fair value before settlement.● Note: Do not use a negative sign with your answer.● Note: If no gain or loss is recorded, select "N/A" and leave the answer blank (zero)