On January 1, 2022, Rosewood Corp. purchased a put option on shares of ICM stock. Terms of
Fantastic news! We've Found the answer you've been seeking!
Question:
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: $220 per share
- Expiration date: May 31, 2022
- Total cost of the option contract: $100
- Seller of the option contract: First Investment Bank
On January 1, 2022, ICM stock was trading at $220 per share.
The following additional information is known:
- On March 31, 2022, the price of ICM stock was $210 per share. A market appraisal indicated that the time value of the option contract was $80.
- On May 10, 2022, the price of ICM stock was $215 per share. A market appraisal indicated that the time value of the option contract was $70. On this date, Rosewood settled the option contract.
Required:
1. Indicate any amounts that Rosewood Corp. would have included in its March 2022 quarterly financial statements related to the option contract.
Related Book For
Intermediate Accounting
ISBN: 978-1118147290
15th edition
Authors: Donald E. Kieso, Jerry J. Weygandt, and Terry D. Warfield
Posted Date: