Valix Finacc vol 1 Problem 14-15

Financial Accounting Volume 1 2008 Valix-Peralta
Chapter 1 Problem 14-15

   2008

Dec. 31   Unrealized loss – futures contract                                         125,000

                        Futures contract payable (25,000 x 5)                                                  125,000

   2009

June   1   Unrealized loss – futures contract                                           75,000

                        Futures contract payable                                                                      75,000

                Futures contract payable – 6/1/2009 (25,000 x P8)                                      200,000

                Futures contract payable – 12/31/2008                                                       125,000

                Increase in derivative liability                                                                        75,000

           1    Futures contract payable                                                   200,000

                        Cash                                                                                                    200,000

           1    Purchases (25,000 x 42)                                                      1,050,000

                        Cash                                                                                                 1,050,000

           1    Loss on futures contract                                                     200,000

                        Unrealized loss – futures contract                                                        200,000