Reference no: EM131288077
On October 15, 2017, Oil Products Co. purchased 4000 barrels of fuel oil with a cost of $240,000. Oil Products is holding this inventory in anticipation of the winter 2018 heatin gseason. Oil Products accounts fo rits inventory at the lower-of-FIFO-cost-or-net realizable value. To hedge against potential declines in the value of the inventory, Oil Products also purhcased a put option on the fuel oil. Oil Products paid an option premium of $300f for th eput option, which gfives Oil Products the option to sell 4000 barrels of fuel oil at a strike price of $60 per gallon. The option expires on March 1, 2018f. The following data are available with respect ot the values of the fuel of inventory and the put option.
Date Market Price of Fuel Oil Time Value of Put Option
Oct. 31 2017
$58 per gallon $175
Nov. 30 2017 $57 per gallon $105
Dec. 31 2017 $54 per gallon $40
a. Prepare the journal entries of Oil products for the following dates
1. october 15,2017- Oil Producs purchases fuel oil and the put option on fuel oil.
2. october 31,2017- Oil Products prepares financial statments
3. november 30, 2017- Oil Products prepares financial statments
4. december 31, 2017- Oil Products prepares financial statments
b. indicate the amount(s) reported on teh balance sheet and income statement related to the fuel oil inventory and the put option on November 30, 2017.
c. indicate the amount(s) freported on the balance sheet and income statement related to the fuel oil and the put option on December 31, 2017.
|
Discuss the theory of absolute advantage
: 1. Explain and discuss the Theory of Absolute Advantage. How does it differ from the Theory of comparative advantage? Make up your own example. Please cite your source.
|
|
Identify some of the employment law
: Identify some of the employment law issues discussed in the Presidential election cycle. In your opinion, what is the most important? Why? Chose at least one news article or academic article to support your opinion or illustrate your discussion.
|
|
What is the maximum percentage of monthly mortgage payment
: David and Mary smith together earn $54,000 per year, David and Mary would like to buy a home for $200,000. They have one child. The new mortgage is $160,000 at 6 1/4 for 30 years for $985.15 per month. what is the maximum percentage of monthly mortga..
|
|
Briefly introduce the topic of generating options
: Briefly introduce the topic of generating options when solving a problem. Describe a formal method by which the advantages and disadvantages of potential options can be evaluated by stakeholder groups to rank the potential options and to resolve c..
|
|
Rits inventory at lower-of-fifo-cost-or-net realizable value
: On October 15, 2017, Oil Products Co. purchased 4000 barrels of fuel oil with a cost of $240,000. Oil Products is holding this inventory in anticipation of the winter 2018 heatin gseason. Oil Products accounts fo rits inventory at the lower-of-FIFO-c..
|
|
What were the norms of the group before and after the shift
: What were the norms of the group before and after the shift?- How did these norms affect group cohesion and performance.
|
|
Short report responding to the questions
: Explore Disney's Website. Prepare a short report responding to the following questions. Describe how Disney handles employee training and development.
|
|
Describe the potential causes of given scenario
: Describe the potential causes of this scenario.- What could the manager have done differently?- How does this affect the overall success of the company?
|
|
What is the estimated net operating income
: Morganton Company makes one product and it provided the following information to help prepare the master budget for its first four months of operations: What is the estimated net operating income for July, if the company always uses an estimated pred..
|