On 1 July 2023, Molly Ltd holds a well-diversified portfolio of shares that is valued at $1.55 million. On this date, it enters into 60 futures contracts on All Ordinaries Share Price Index futures in which it takes a sell position. The All Ordinaries Index on 1 July 2023 is 2500 with $10 per index point. So the total price of the futures contract is calculated as 2500 × 60 × $10 contracts = $1,500,000. A total deposit of $100,000 is paid on the futures contracts. On 29 July 2023 Molly Ltd decides to sell its portfolio of shares and close out its futures contracts. On this date, the market value of the share portfolio is $1.725 million and the All Ordinaries Index is 2720. 

Required: 

Prepare the entries of Molly Ltd for any financial assets or financial liabilities that arise in each case and show your working process.

Answer rating: 100% (QA)

As per the given information sale at index price 2500 buy at i... View the full answer