Monroe Ltd acquired a parcel of 50 000 call options in Sunrise Ltd on 1 November 2018. The price of the options was $1.50 each and they may be exercised any time prior to 30 June 2021 at exercise price of $30. On the same date the market price for Sunrise Ltd shares is $25. On Monroe Ltd's balance date—30 June 2019—the company is still holding the options. The market price of the options at that time was $1.90 each and the share price was $27. What is the financial effect of the above transactions on Monroe Ltd's statement of comprehensive income for the year ending 30 June 2019?
Monroe Ltd acquired a parcel of 50 000 call options in Sunrise Ltd on 1 November 2018. The price of the options was $1.50 each and they may be exercised any time prior to 30 June 2021 at exercise price of $30. On the same date the market price for Sunrise Ltd shares is $25. On Monroe Ltd's balance date—30 June 2019—the company is still holding the options. The market price of the options at that time was $1.90 each and the share price was $27. What is the financial effect of the above transactions on Monroe Ltd's statement of comprehensive income for the year ending 30 June 2019?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Monroe Ltd acquired a parcel of 50 000 call options in Sunrise Ltd on 1 November 2018. The price of the options was $1.50 each and they may be exercised any time prior to 30 June 2021 at exercise price of $30. On the same date the market price for Sunrise Ltd shares is $25. On Monroe Ltd's balance date—30 June 2019—the company is still holding the options. The market price of the options at that time was $1.90 each and the share price was $27. What is the financial effect of the above transactions on Monroe Ltd's statement of comprehensive income for the year ending 30 June 2019?
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