a midwest food processor forecasts purchasing 300000 pounds of soybean oil in may on february 20 the company acquires an optio

The company settled the option on April 20 and purchased 300,000 pounds of soybean oil on May 3 at a spot price of $1.63 per pound. During May, the soybean oil was used to produce food. One-half of the resulting food was sold in June. The change in the option’s time value is excluded from the assessment of hedge effectiveness.
Required
1. Prepare all necessary journal entries through June to reflect the above activity.
2. What would the effect on earnings have been had the forecasted purchase not been hedged?