Question
In: Accounting
On January 1, 2018, Adams-Meneke Corporation granted 90 million incentive stock options to division managers, each...
On January 1, 2018, Adams-Meneke Corporation granted 90 million incentive stock options to division managers, each permitting holders to purchase one share of the company’s $1 par common shares within the next six years, but not before December 31, 2020 (the vesting date). The exercise price is the market price of the shares on the date of grant, currently $20 per share. The fair value of the options, estimated by an appropriate option pricing model, is $2 per option. Management’s policy is to estimate forfeitures. No forfeitures are anticipated. Ignore taxes. Required: 1. Determine the total compensation cost pertaining to the options on January 1, 2018. 2. Prepare the appropriate journal entry to record compensation expense on December 31, 2018. 3. Unexpected turnover during 2019 caused an estimate of the forfeiture of 5% of the stock options. Determine the adjusted compensation cost, and prepare the appropriate journal entry(s) on December 31, 2019 and 2020. (Please show calculations, not just answers.)
Solutions
ekkarill92 answered 1 year agoRelated Solutions
On January 1, 2018, Adams-Meneke Corporation granted 90 million incentive stock options to division managers, each...
On January 1, 2018, Adams-Meneke Corporation granted 90 million
incentive stock options to division managers, each permitting
holders to purchase one share of the company’s $1 par common shares
within the next six years, but not before December 31, 2020 (the
vesting date). The exercise price is the market price of the shares
on the date of grant, currently $20 per share. The fair value of
the options, estimated by an appropriate option pricing model, is
$2 per option. Management’s...
On January 1, 2018, Adams-Meneke Corporation granted 15 million incentive stock options to division managers, each...
On January 1, 2018, Adams-Meneke Corporation granted 15 million
incentive stock options to division managers, each permitting
holders to purchase one share of the company’s $1 par common shares
within the next six years, but not before December 31, 2020 (the
vesting date). The exercise price is the market price of the shares
on the date of grant, currently $50 per share. The fair value of
the options, estimated by an appropriate option pricing model, is
$5 per option. Management’s...
On January 1, 2018, Adams-Meneke Corporation granted 24 million incentive stock options to division managers, each...
On January 1, 2018, Adams-Meneke Corporation granted 24 million
incentive stock options to division managers, each permitting
holders to purchase one share of the company’s $1 par common shares
within the next six years, but not before December 31, 2020 (the
vesting date). The exercise price is the market price of the shares
on the date of grant, currently $22 per share. The fair value of
the options, estimated by an appropriate option pricing model, is
$5 per option. Management’s...
On January 1, 2018, Hugh Morris Comedy Club (HMCC) granted 1.4 million stock options to key...
On January 1, 2018, Hugh Morris Comedy Club (HMCC) granted 1.4
million stock options to key executives exercisable for 1.4 million
shares of the company’s common stock at $30 per share. The stock
options are intended as compensation for the next three years. The
options are exercisable within a four-year period beginning January
1, 2021, by the executives still in the employ of the company. No
options were terminated during 2018. The market price of the common
stock was $32...
On January 1, 2018, M Company granted 95,000 stock options to certain executives. The options are...
On January 1, 2018, M Company granted 95,000 stock options to
certain executives. The options are exercisable no sooner than
December 31, 2020, and expire on January 1, 2024. Each option can
be exercised to acquire one share of $1 par common stock for $10.
An option-pricing model estimates the fair value of the options to
be $4 on the date of grant.
If unexpected turnover in 2019 caused the company to estimate that
15% of the options would be...
Under its executive stock option plan, M Corporation granted options on January 1, 2018, that permit...
Under its executive stock option plan, M Corporation granted
options on January 1, 2018, that permit executives to purchase 15
million of the company's $1 par common shares within the next eight
years, but not before December 31, 2020 (the vesting date). The
exercise price is the market price of the shares on the date of
grant, $18 per share. The fair value of the options, estimated by
an appropriate option pricing model, is $4 per option. No
forfeitures were...
Under its executive stock option plan, Q Corporation granted options on January 1, 2018, that permit...
Under its executive stock option plan, Q Corporation granted
options on January 1, 2018, that permit executives to purchase 15
million of the company's $1 par common shares within the next eight
years, but not before December 31, 2020 (the vesting date). The
exercise price is the market price of the shares on the date of
grant, $18 per share. The fair value of the options, estimated by
an appropriate option pricing model, is $4 per option. No
forfeitures were...
part a Under its executive stock option plan, N Corporation granted options on January 1, 2018,...
part a
Under its executive stock option plan, N Corporation granted
options on January 1, 2018, that permit executives to purchase 15
million of the company's $1 par common shares within the next eight
years, but not before December 31, 2020 (the vesting date). The
exercise price is the market price of the shares on the date of
grant, $18 per share. The fair value of the options, estimated by
an appropriate option pricing model, is $4 per option. No...
On January 1, 2018, Cullumber Inc. granted stock options to officers and key employees for the...
On January 1, 2018, Cullumber Inc. granted stock options to
officers and key employees for the purchase of 20,000 shares of the
company’s $10 par common stock at $27 per share. The options were
exercisable within a 5-year period beginning January 1, 2020, by
grantees still in the employ of the company, and expiring December
31, 2024. The service period for this award is 2 years. Assume that
the fair value option-pricing model determines total compensation
expense to be $323,200....
On January 1, 2018 Martinez Inc. granted stock options to officers and key employees for the...
On
January 1, 2018 Martinez Inc. granted stock options to officers and
key employees for the purchase of 19000 shares of the company's $10
par common stock at $25 per share. The options were exercisable
within a 5 year period beginning January 1, 2020 by grantees still
in the employ of the company, and expiring December 31, 2024. The
service period for this awards is 2 years. Assume that the fair
value option pricing model determines total compensation expense to...
ADVERTISEMENT
ADVERTISEMENT
Latest Questions
- From 1965 to present, feminism sought to critique mainstream American society in order to challenge proscribed...
- For 20Y2, Tri-Comic Company initiated a sales promotion campaign that included the expenditure of an additional...
- Paymaster Enterprises has arranged to finance its seasonal working-capital needs with a short-term bank loan. The...
- TOWS matrix of WOW MOMO
- Write an anecdotal lead with a person focus from the following information; include a nut graph....
- Step 1 Picture yourself as a Senior Product Manager in your favorite industry. This could be...
- Gauss Jordan elimination using python for a 2d list (3x3) without using any library. Thanks
ADVERTISEMENT