$3$ Record the entry to recognize the increase in the value of the foreign currency option$\mathrm{.}4$ Record entry to recognize the decrease in the time value of the option as an increase in cost of goods sold$\mathrm{.}5$ Record the entry to recognize the increase in the value of the foreign currency option$\mathrm{.}6$ Record entry to recognize the decrease in the time value of the option as an increase in cost of goods sold. Note : $=$ Journal entry has been entered. Based on past experience, Maas Corporation $($a U$.$S$.-$based company$)$ expects to purchase raw materlals from a foreign supplier at a cost of $\backslash (1,100,000\backslash )$ francs on March $15,2024.$ To hedge this forecasted transaction, on December $15,2023,$ the company acquires a call option to purchase $\backslash (1,100,000\backslash )$ francs in three months. Maas selects a strike price of $\backslash (\backslash$$ $0\mathrm{.}81\backslash )$ per franc when the spot rate is $\backslash (\backslash$$ $0\mathrm{.}81\backslash )$ and pays a premium of $\backslash (\backslash$$ $0\mathrm{.}002\backslash )$ per franc. The spot rate increases to $\backslash (\backslash$$ $0\mathrm{.}817\backslash )$ at December $31,2023,$ causing the fair value of the option to increase to $\backslash (\backslash$$ $9,000\backslash ).$ By March $15,2024,$ when the raw materials are purchased, the spot rate has climbed to $\backslash (\backslash$$ $0\mathrm{.}83\backslash ),$ resulting in a fair value for the option of $\backslash (\backslash$$ $22,000\backslash ).$ The raw materlals are used in assembling finished products, which are sold by December $31,2024,$ when Maas prepares its annual financial statements.

Required:

a$.$ Prepare all journal entries for the option hedge of a forecasted transaction and for the purchase of raw materials.

b$.$ What is the overall impact on net income over the two accounting periods?

c$.$ What is the net cash outflow to acquire the raw materials? $3$ Record the entry to recognize the increase in the value of the foreign currency option$\mathrm{.}4$ Record entry to recognize the decrease in the time value of the option as an increase in cost of goods sold$\mathrm{.}5$ Record the entry to recognize the increase in the value of the foreign currency option$\mathrm{.}6$ Record entry to recognize the decrease in the time value of the option as an increase in cost of goods sold.

Note : $=$ Journal entry has been entered.

Prepare all journal entries for the option hedge of a forecasted transaction and for the purchase of raw materials.

Note: If no entry is required for a transaction$/$event$,$ select $"$No Journal Entry Required" in the first account field$\mathrm{.}5$ Record the entry to recognize the increase in the value of the foreign currency option$\mathrm{.}6$ Record entry to recognize the decrease in the time value of the option as an increase in cost of goods sold$\mathrm{.}9$ Record entry to transfer the amount accumulated in AOCI$\mathrm{.}10$ Record entry to transfer the cost of the raw materials to cost of goods sold. b$.$ What is the overall impact on net income over the two accounting periods?

Note: Negative amounts should be entered with a minus sign.

c$.$ What is the net cash outflow to acquire the raw materials?

c$.$ Net cash outflow