A-12: Put option

On March 1, 2022, Ferguson Corp. purchased a put option on shares of SST stock. The contract was for 100 shares at a strike price of $90 per share, with an expiration date of May 31, 2022. Ferguson settled the option on May 5 (assume cash settlement). Additional information pertaining to the option is provided below.

	March 1	March 31	May 5
Price of SST stock:	$90	$80	$85
Time value of option:	$50	$40	$30

Required: 1. What is cost of the option paid by Ferguson Corp. on March 1, 2022? 2. Compute the balance of the option account on May 5 before the settlement.