Basket Ltd acquired a parcel of 50,000 call options in Snake and Asp Ltd on 1 November 2004.The price of the options was $0.40 each and they may be exercised any time prior to 30 June 2006.The exercise price is $30.On Basket Ltd's balance date - 30 June 2006 - the company is still holding the options.The market price of the options at that time was $0.39 each and the price of Remorse Company's shares had risen to $28 having previously fallen to $15.What are the entries required to record the purchase of the options and the likely action of Basket Ltd?
A.

B.

C.

D.

E. None of the given answers.

Question

Basket Ltd acquired a parcel of 50,000 call options in Snake and Asp Ltd on 1 November 2004.The price of the options was $0.40 each and they may be exercised any time prior to 30 June 2006.The exercise price is $30.On Basket Ltd's balance date - 30 June 2006 - the company is still holding the options.The market price of the options at that time was $0.39 each and the price of Remorse Company's shares had risen to $28 having previously fallen to $15.What are the entries required to record the purchase of the options and the likely action of Basket Ltd?
A.
  
B.
  
C.
  
D.
  
E. None of the given answers.

Quizplus · Accepted Answer

The Answer of Basket Ltd acquired a parcel of 50,000 call options in Snake and Asp Ltd on 1 November 2004.The price of the options was $0.40 each and they may be exercised any time prior to 30 June 2006.The exercise price is $30.On Basket Ltd's balance date - 30 June 2006 - the company is still holding the options.The market price of the options at that time was $0.39 each and the price of Remorse Company's shares had risen to $28 having previously fallen to $15.What are the entries required to record the purchase of the options and the likely action of Basket Ltd?
A.
  
B.
  
C.
  
D.
  
E. None of the given answers.

Basket Ltd Acquired a Parcel of 50,000 Call Options in Snake