Question

In: Accounting

Pastner Brands is a calendar-year firm with operations in several countries. As part of its executive...

Pastner Brands is a calendar-year firm with operations in several countries. As part of its executive compensation plan, at January 1, 2018, the company issued 440,000 executive stock options permitting executives to buy 440,000 shares of Pastner stock for $39 per share. One-fourth of the options vest in each of the next four years beginning at December 31, 2018 (graded vesting). Pastner elects to separate the total award into four groups (or tranches) according to the year in which they vest and measures the compensation cost for each vesting date as a separate award. The fair value of each tranche is estimated at January 1, 2018, as follows: Vesting Date Amount Vesting Fair Value per Option Dec. 31, 2018 25 % $ 4.00 Dec. 31, 2019 25 % $ 4.40 Dec. 31, 2020 25 % $ 4.80 Dec. 31, 2021 25 % $ 5.60 Required: 1. Determine the compensation expense related to the options to be recorded each year 2018–2021, assuming Pastner allocates the compensation cost for each of the four groups (tranches) separately. 2. Determine the compensation expense related to the options to be recorded each year 2018–2021, assuming Pastner uses the straight-line method to allocate the total compensation cost.

Solutions

Expert Solution

ekkarill92 answered 1 year ago
Next > < Previous

Related Solutions

Pastner Brands is a calendar-year firm with operations in several countries. As part of its executive...
Pastner Brands is a calendar-year firm with operations in several countries. As part of its executive compensation plan, at January 1, 2018, the company issued 320,000 executive stock options permitting executives to buy 320,000 shares of Pastner stock for $29 per share. One-fourth of the options vest in each of the next four years beginning at December 31, 2018 (graded vesting). Pastner elects to measure the fair value of all options on January 1, 2018, to be $6.60 per option...
Pastner Brands is a calendar-year firm with operations in several countries. As part of its executive...
Pastner Brands is a calendar-year firm with operations in several countries. As part of its executive compensation plan, at January 1, 2018, the company issued 440,000 executive stock options permitting executives to buy 440,000 shares of Pastner stock for $36 per share. One-fourth of the options vest in each of the next four years beginning at December 31, 2018 (graded vesting). Pastner elects to separate the total award into four groups (or tranches) according to the year in which they...
Pastner Brands is a calendar-year firm with operations in several countries. As part of its executive...
Pastner Brands is a calendar-year firm with operations in several countries. As part of its executive compensation plan, at January 1, 2018, the company issued 480,000 executive stock options permitting executives to buy 480,000 shares of Pastner stock for $40 per share. One-fourth of the options vest in each of the next four years beginning at December 31, 2018 (graded vesting). Pastner elects to separate the total award into four groups (or tranches) according to the year in which they...
Pastner Brands is a calendar-year firm with operations in several countries. As part of its executive...
Pastner Brands is a calendar-year firm with operations in several countries. As part of its executive compensation plan, at January 1, 2018, the company issued 480,000 executive stock options permitting executives to buy 480,000 shares of Pastner stock for $43 per share. One-fourth of the options vest in each of the next four years beginning at December 31, 2018 (graded vesting). Pastner elects to separate the total award into four groups (or tranches) according to the year in which they...
Pastner Brands is a calendar-year firm with operations in several countries. As part of its executive...
Pastner Brands is a calendar-year firm with operations in several countries. As part of its executive compensation plan, at January 1, 2021, the company issued 320,000 executive stock options permitting executives to buy 320,000 shares of Pastner stock for $44 per share. One-fourth of the options vest in each of the next four years beginning at December 31, 2021 (graded vesting). Pastner elects to separate the total award into four groups (or tranches) according to the year in which they...
Sunshine Company is a calendar year accrual-basis taxpayer and is in its first year of operations....
Sunshine Company is a calendar year accrual-basis taxpayer and is in its first year of operations. Sunshine Company had the following income, expense, and loss items for the current year: Sales $650,000 Corporate dividend (from 5% owned corporation) 60,000 Municipal bond interest 25,000 Long-term capital gain 0 Short-term capital loss (8,000) Cost of goods sold 320,000 Depreciation 65,000 Nondeductible fines 4,000 Advertising 7,000 Utilities 6,000 Rent 5,000 Furthermore, Sunshine’s liabilities (all recourse) increased from $0 on 1/1 to $300,000 on...
Sunshine Company is a calendar year accrual-basis taxpayer and is in its first year of operations....
Sunshine Company is a calendar year accrual-basis taxpayer and is in its first year of operations. Sunshine Company had the following income, expense, and loss items for the current year: Sales $650,000 Corporate dividend (from 5% owned corporation) 60,000 Municipal bond interest 25,000 Long-term capital gain 0 Short-term capital loss (8,000) Cost of goods sold 320,000 Depreciation 65,000 Nondeductible fines 4,000 Advertising 7,000 Utilities 6,000 Rent 5,000 Furthermore, Sunshine’s liabilities (all recourse) increased from $0 on 1/1 to $300,000 on...
Sunshine Company is a calendar year accrual-basis taxpayer and is in its first year of operations....
Sunshine Company is a calendar year accrual-basis taxpayer and is in its first year of operations. Sunshine Company had the following income, expense, and loss items for the current year: Sales $650,000 Corporate dividend (from 5% owned corporation) 60,000 Municipal bond interest 25,000 Long-term capital gain 0 Short-term capital loss (8,000) Cost of goods sold 320,000 Depreciation 65,000 Nondeductible fines 4,000 Advertising 7,000 Utilities 6,000 Rent 5,000 Furthermore, Sunshine’s liabilities (all recourse) increased from $0 on 1/1 to $300,000 on...
Meganol Company is a calendar year accrual-basis taxpayer and is in its first year of operations....
Meganol Company is a calendar year accrual-basis taxpayer and is in its first year of operations. Meganol Company had the following income, expense, and loss items for the current year: Sales $650,000 Corporate dividend (from 5% owned corporation) 60,000 Municipal bond interest 25,000 Long-term capital gain 0 Short-term capital loss (8,000) Cost of goods sold 320,000 Depreciation 65,000 Nondeductible fines 4,000 Advertising 7,000 Utilities 6,000 Rent 5,000 Furthermore, Meganol's liabilities (all recourse) increased from $0 on 1/1 to $300,000 on...
Sunshine Company is a calendar year accrual-basis taxpayer and is in its first year of operations....
Sunshine Company is a calendar year accrual-basis taxpayer and is in its first year of operations. Sunshine Company had the following income, expense, and loss items for the current year: Sales $650,000 Corporate dividend (from 5% owned corporation) 60,000 Municipal bond interest 25,000 Long-term capital gain 0 Short-term capital loss (8,000) Cost of goods sold 320,000 Depreciation 65,000 Nondeductible fines 4,000 Advertising 7,000 Utilities 6,000 Rent 5,000 Furthermore, Sunshine’s liabilities (all recourse) increased from $0 on 1/1 to $300,000 on...
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT