Question: Refer to Practice 19-7. Make any necessary journal entry on the shirt companys books on December 31 of Year 1 in connection with the cotton

Refer to Practice 19-7. Make any necessary journal entry on the shirt company’s books on December 31 of Year 1 in connection with the cotton option contract, assuming that the price of cotton per pound on that date is

(1) $0.52,

(2) $0.30, and

(3) $0.39.

Remember that the cotton option was purchased for $2,500.


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