On October 2, 20X1, Best Company paid $200 to purchase a call option contract to purchase 1,000 shares of Winter Corporation's
common stock on March 1, 20X2. Winter Corporation stock was trading at $100 per share on October 2, 20X1 and $150 per share on
December 31, 20X1. The appraised time value of the option contract at December 31, 20X1 is $140. Which of the following
statements about the option contact is correct?
The options contract will be reported as a current asset at its cost of $200 with no unrealized holding gains or losses
recognized.
The option contract will be reported as a current asset at its intrinsic value of $50,200 on the December 31, 20X1 balance
sheet.
Best will report an unrealized holding gain in other comprehensive income of $50,000 on the options contract for 20X1.
The asset's $50,140 carrying value will be reported as a current asset on Best's December 31, 20X1 balance sheet.