suppose that in september 2022, a company purchases 5 may 2023 crude oil futures to hedge a future purchase of crude oil. each contract is for the delivery of 1000 barrels of crude oil. the future prices is 96 when it enter into the contract, 98 at the end of december 2022, 102 when it closes out its future position and 104 on the futures contracts first delivery date

Assume companies year end is December 31

I. the company is taxed on a profit of 30,000 in 2023

II. the company is taxed on a profit of 10,000 in 2022

Which of the following is correct?

A. Statement 1 and II are incorrect

B. Statment I is incorrect, statements II is correct

C. Statement I is correct, statement II is incorrect

D. Statements I and II are correct