On January 2, 2014, Joes company purchases a call option for $300 on Merchant common stock. The call option gives Joes the option to buy 1,000 shares of Merchant at a strike price of $50 per share. The market price of a Merchant share is $50 on January 2, 2014 (the intrinsic value is therefore $0). On March 31, 2014, the market price for Merchant stock is $53 per share, and the time value of the option is $200.

Instructions:

(a) Prepare the journal entry to record the purchase of the call option on January 2, 2014.

(b) Prepare the journal entry(ies) to recognize the change in the fair value of the call option as of March 31, 2014.

(c) What was the effect on net income of entering into the derivative transaction for the period January 2 to March 31, 2014?

answer: e

explanation:

answer; property tax payment made in july and december;

the answer is "b.the increased supply will create a surplus. "

the essential thought behind price controls is straightforward - utilize the power of law to modify the equilibrium of a market. for instance, the legislature may choose that the steel business needs to survive, and in this way pass a law to set a value floor on steel. this implies all steel sold must offer at or over the floor value, which must be set over the equilibrium cost for it to have any impact. the switch could likewise happen - the administration can choose that steel is excessively costly and set a value roof underneath its equilibrium value, with the goal that all steel must be sold at or beneath that ceiling.