1.Record the firm commitment to purchase 10,000 tons of iron ore pellets from a supplier to satisfy spring production demands

2.Record the change in fair value of the futures contract to sell 10,000 tons of iron ore on April 30 for $77/ton but the price of iron ore fell to $76/ton on March 31

3.Record the change in fair value of the firm commitment to sell 10,000 tons of iron ore on April 30 for $77/ton but the price of iron ore fell to $76/ton on March 31

4. Record the change in fair value of the futures contract when the price of iron ore fell to $75/ton on April 30.

5. Record the change in fair value of the firm commitment when the price of iron ore fell to $75/ton on April 30.

6. Record the net settlement of the futures contract.

7. Record the purchase of inventory.

Arlington Steel Company is a producer of raw steel and steel-related products. On January 3, 2022, Arlington enters into a firm commitment to purchase 10,000 tons of iron ore pellets from a supplier to satisfy spring production demands. The purchase is to be at a fixed price of $77 per ton on April 30, 2022. To protect against the risk of changes in the fair value of the commitment contract, Arlington enters into a futures contract to sell 10.000 tons of iron ore on April 30 for $77/ton (the current price). The contract calls for net cosh settlement, and the company must report changes in the fair values of its hedging instruments each quarter Required: On March 31, the price of iron ore fell to $76 ton, and then to $75 ton on April 30, 1. Calculate the net cash settlement at April 30, 2022 2. Prepare the journal entries for the period January 3 to April 30, 2022, to record the firm commitment, necessary adjustments for changes in fair value, and seulement of the futures contract Arlington Steel Company is a producer of raw steel and steel-related products. On January 3, 2022, Arlington enters into a firm commitment to purchase 10,000 tons of iron ore pellets from a supplier to satisfy spring production demands. The purchase is to be at a fixed price of $77 per ton on April 30, 2022. To protect against the risk of changes in the fair value of the commitment contract, Arlington enters into a futures contract to sell 10.000 tons of iron ore on April 30 for $77/ton (the current price). The contract calls for net cosh settlement, and the company must report changes in the fair values of its hedging instruments each quarter Required: On March 31, the price of iron ore fell to $76 ton, and then to $75 ton on April 30, 1. Calculate the net cash settlement at April 30, 2022 2. Prepare the journal entries for the period January 3 to April 30, 2022, to record the firm commitment, necessary adjustments for changes in fair value, and seulement of the futures contract