Based on past experlence, Maas Corporation $($a U$.$S$.-$based company$)$ expects to purchase raw materlals from a forelgn supplier at a

cost of $1,700,000$ francs on March $15,2024.$ To hedge this forecasted transaction, on December $15,2023,$ the company acqulres a cal

option to purchase $1,700,000$ francs In three months. Maas selects a strike price of $$0\mathrm{.}76$ per franc when the spot rate Is $$0\mathrm{.}76$ and pays a premlum of $$0\mathrm{.}001$ per franc. The spot rate Increases to $$0\mathrm{.}763$ at December $31,2023,$ causing the falr value of the optlon to

pays a premlum of $$0\mathrm{.}001$ per franc. The spot rate Increases to $$0\mathrm{.}763$ at December $31,2023,$ causing the falr value of the option to Increase to $$6,000.$ By March $15,2024,$ when the raw materlals are purchased, the spot rate has climbed to $$0\mathrm{.}78,$ resulting in a falr

Increase to $$6,000.$ By March $15,2024,$ when the raw materlals are purchased, the spot rate has climbed to $$0\mathrm{.}78,$ resulting in a falr value for the option of $$34,000.$ The raw materlals are used in assembling finlshed products, which are sold by December $31,2024,$

when Maas prepares its annual financlal statements.

Required:

a$.$ Prepare all journal entrles for the optlon hedge of a forecasted transaction and for the purchase of raw materlals.

b$.$ What is the overall impact on net Income over the two accounting periods?

c$.$ What is the net cash outflow to acquire the raw materlals?

$$ Answer is not complete.

Complete this question by entering your answers in the tabs below.

Req A Req B and C

Prepare all journal entries for the option hedge of a forecasted transaction and for the purchase of raw materials.

Prepare all journal entries for the option hedge of a forecasted transaction and for the purchase of raw materials, Note: If no entry is required for a transaction$/$event$,$ select $"$No Journal Entry Required" in the first account field.

Based on past experlence, Maas Corporation $($a U$.$S$.-$based company$)$ expects to purchase raw materlals from a forelgn supplier at a

cost of $1,700,000$ francs on March $15,2024.$ To hedge this forecasted transaction, on December $15,2023,$ the company acquires a call

option to purchase $1,700,000$ francs in three months. Maas selects a strike price of $$0\mathrm{.}76$ per franc when the spot rate is $$0\mathrm{.}76$ and

pays a premlum of $$0\mathrm{.}001$ per franc. The spot rate Increases to $$0\mathrm{.}763$ at December $31,2023,$ causing the falr value of the option to

Increase to $$6,000.$ By March $15,2024,$ when the raw materlals are purchased, the spot rate has climbed to $$0\mathrm{.}78,$ resulting in a falr

value for the option of $$34,000.$ The raw materlals are used in assembling finished products, which are sold by December $31,2024.$

when Maas prepares Its annual financial statements.

Required:

a$.$ Prepare all journal entrles for the option hedge of a forecasted transaction and for the purchase of raw materials.

b$.$ What is the overall impact on net Income over the two accounting periods?

c$.$ What is the net cash outflow to acqulre the raw materlals?

Answer is not complete.

Complete this question by entering your answers in the tabs below.

Req A

b$.$ What is the overall impact on net income over the two accounting periods?

Note: Negative amounts should be entered with a minus sign.

c$.$ What is the net cash outflow to acquire the raw materials?