On May 1, 2024, a company has merchandise reported at a cost of $150,000 and with a fair value of $175,000. It invests $900 in 3-month put options with a strike price of $175,000. At the companys June 30, 2024 year-end, the merchandise has a fair value of $172,000 and the options are worth $3,400. On July 31, 2024, the merchandise has a fair value of $170,000 and the company sells the options for their intrinsic value of $5,000. The company uses hedge accounting, the options qualify as a fair value hedge of the inventory, and option time value is straight-line amortized over 3 months. The company reports the merchandise inventory at what value on June 30, 2024?

Select one:

a. $172,000

b. $150,000

c. $169,000

d. $147,000