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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 $55 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 $55/ton (the current price). The contract calls for net cash 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 $53/ton, and then to $51/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 settlement of the futures contract. Complete this question by entering your answers in the tabs below. Required 1 Required 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 settlement of the futures contract. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) View transaction list View journal entry worksheet No Date General Journal Debit Credit 1 January 03 No journal entry required 2 March 31 Futures contract Cost of goods sold 3 March 31 4 April 30 April 30 April 30 April 30 110 5 6 7 Cost of goods sold Firm commitment Futures contract Cost of goods sold Cost of goods sold Firm commitment Futures contract Cash Inventory Firm commitment Cash 20,000 20,000 20,000 20,000 40,000 51,000 40,000 20.000 20,000 20,000 20,000 40,000 55.000