On December 1, 2018 a company bought a call option costing $100,000 as a speculative investment. The call option gave th

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On December 1 2018 A Company Bought A Call Option Costing 100 000 As A Speculative Investment The Call Option Gave Th 1 (324.97 KiB) Viewed 33 times

On December 1, 2018 a company bought a call option costing $100,000 as a speculative investment. The call option gave the company the right to purchase 100,000 bushels of corn for $110 per bushel during April 2019. As of December 31, 2018 the call option had a value of $115,000. The company liquidated the call option on April 15, 2019 in exchange for $165,000. Which of the following accurately describes GAAP accounting for the call option? The realized gain recognized on April 15, 2019 if $65,000 The realized gain applicable to the year ending 12/31/18 is $15,000 The unrealized gain recognized on April 15, 2019 is $50,000 The call option will be reported on the 12/31/18 balance sheet at $115,000 and a $15,000 unrealized gain will be reported as a component of income from continuing operations for the year ended 12/31/18