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REFER TO THE PHOTO ATTACHED On December 1, 2018, SONY Company paid P10,000 to purchase a 90-day put option for FC500,000. The option's purpose is

REFER TO THE PHOTO ATTACHED

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On December 1, 2018, SONY Company paid P10,000 to purchase a 90-day put option for FC500,000. The option's purpose is to hedge an exposed accounts receivable of FC500,000 from a sale of merchandise. The merchandise is to be shipped on December 1, 2018, payment for which is due on March 1, 2019. Relevant rates and market values at different dates are as follows: 12/01/2018 12/31/2018 03/01/2019 Spot rate (market price) P1.20 P1.11 P1.14 Strike price (exercise price) 1.20 1.20 1.20 Fair Value of Put Option P56,000

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