On January 1, 2022, Mills Corp. purchased a call option on shares of XYZ stock. Terms of the contract were as follows: Number of shares: 100 . Strike price: $120 per share Expiration date: April 30, 2022 Total cost of the option contract paid at signing: $90 • Seller of the option contract: First Investment Bank On January 1, 2022, XYZ stock was trading at $120 per share. The following additional information is known: . On March 31, 2022, the price of XYZ stock was $140 per share. A market appraisal indicated that the time value of the option contract was $70. . On April 5, 2022, the price of XYZ stock was $135 per share. A market appraisal indicated that the time value of the option contract was $60. On this date, Mills settled the option contract. Required: 1. Indicate any amounts that Mills Corp. would have included in its March 2022 quarterly financial statements related to the option contract. Complete this question by entering your answers in the tabs below. Req 1 Indicate any amounts that Mills Corp. would have included in its March 2022 quarterly financial statements related to the option contract.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Required:
1. Indicate any amounts that Mills Corp. would have included in its March 2022 quarterly financial statements related to the option
contract.
Complete this question by entering your answers in the tabs below.
Req 1
Indicate any amounts that Mills Corp. would have included in its March 2022 quarterly financial statements related to the
option contract.
Balance Sheet (current assets):
Gain on settlement of call option
Income Statement (partial):
Net gain (unrealized, NI)
2,000
2,000
Reg 1
naxi
Transcribed Image Text:ded Required: 1. Indicate any amounts that Mills Corp. would have included in its March 2022 quarterly financial statements related to the option contract. Complete this question by entering your answers in the tabs below. Req 1 Indicate any amounts that Mills Corp. would have included in its March 2022 quarterly financial statements related to the option contract. Balance Sheet (current assets): Gain on settlement of call option Income Statement (partial): Net gain (unrealized, NI) 2,000 2,000 Reg 1 naxi
On January 1, 2022, Mills Corp. purchased a call option on shares of XYZ stock. Terms of the contract were as follows:
• Number of shares: 100
• Strike price: $120 per share
• Expiration date: April 30, 2022
•Total cost of the option contract paid at signing: $90
• Seller of the option contract: First Investment Bank
On January 1, 2022, XYZ stock was trading at $120 per share.
The following additional information is known:
. On March 31, 2022, the price of XYZ stock was $140 per share. A market appraisal indicated that the time value of the option
contract was $70.
. On April 5, 2022, the price of XYZ stock was $135 per share. A market appraisal indicated that the time value of the option
contract was $60. On this date, Mills settled the option contract.
Required:
1. Indicate any amounts that Mills Corp. would have included in its March 2022 quarterly financial statements related to the option
contract
Complete this question by entering your answers in the tabs below.
Req 1
Indicate any amounts that Mills Corp. would have included in its March 2022 quarterly financial statements related to the
option contract.
Transcribed Image Text:On January 1, 2022, Mills Corp. purchased a call option on shares of XYZ stock. Terms of the contract were as follows: • Number of shares: 100 • Strike price: $120 per share • Expiration date: April 30, 2022 •Total cost of the option contract paid at signing: $90 • Seller of the option contract: First Investment Bank On January 1, 2022, XYZ stock was trading at $120 per share. The following additional information is known: . On March 31, 2022, the price of XYZ stock was $140 per share. A market appraisal indicated that the time value of the option contract was $70. . On April 5, 2022, the price of XYZ stock was $135 per share. A market appraisal indicated that the time value of the option contract was $60. On this date, Mills settled the option contract. Required: 1. Indicate any amounts that Mills Corp. would have included in its March 2022 quarterly financial statements related to the option contract Complete this question by entering your answers in the tabs below. Req 1 Indicate any amounts that Mills Corp. would have included in its March 2022 quarterly financial statements related to the option contract.
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