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 $170 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. Price of SST stock: March 1 $170 Time value of option: $40 Required: March 31 $160 $30 May 5 $165 $20 1. What is cost of the option paid by Ferguson Corp. to enter the contract on March 1, 2022? In other words, what is the fair value of the option at March 1, 2022? 2. Compute the balance of the option account on May 5 just before the settlement. 1. Cost of option $ 4,000 2. Put Option account balance on settlement date: $ 1,500)