Answered: 1. Estimate the total compensation…

1. Estimate the total compensation costs for 10 million options: 2. Estimate the total compensation costs for fiscal years 2021 and 2022: 3. Write TobyCo's journal entries for fiscal year 2021:

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter15: Contributed Capital

Section: Chapter Questions

Problem 7RE: On January 1, 2019, Phoenix Corporation adopts a performance-based share option plan for 25...

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On January 1, 2021, a company granted stock options for 89,000 shares of its $12 par value common stock to its key employees. Each option entitles the employees to purchase one share of common stock at $22. The Black-Scholes option pricing model determines total compensation expense to be $220,000. The options are exercisable beginning January 1, 2024. On January 1, 2024, when the market price of the stock was $35 per share, 5,000 options were exercised. To record the 5,000 options exercised, the company should record Cash in the amount of $__________. (if no cash amount should be recorded, then enter 0).
On January 1, 2016, sixty executives are offered a fixed compensatory stock option plan in which each of them will receive options to buy 6,000 shares of $10 par common stock at $40 a share. On the grant date, the fair value per option is $7.50. There is a three-year service period and an estimated annual employee turnover rate of 2%. Required: a. Compute the expected total compensation cost. b. Compute the compensation expense for 2016. c. Prepare the journal entry to record the exercise of options by six of the executives on January 1, 2019.
On January 1, 2019, Kyle company established a share appreciation rights plan to key employees where they are to receive cash at any time during the next four years. The predetermined price is P40 on 60,000 share appreciation rights (SARs) of which 20,000 SARs were exercised on December 31, 2021. Market prices on the following dates are as follows: Jan. 1, 2019, P50, Dec. 31, 2019, P56, Dec. 31, 2020, P70 and P60 on Dec. 31, 2021.a. Determine the amount of compensation expense to be recognized for the year 2019, 2020 and 2021.b. Determine the amount of liability to be presented in the statement of financial position for the year ended December 31, 2019, December 31, 2020 and December 31, 2021.c. Prepare the journal entries for 2019, 2020 and 2021.
In order to retain certain key executives, Sheridan Company granted them incentive stock options on December 31, 2020. 144000 options were granted at an option price of $35 per share. Market prices of the stock were as follows: December 31, 2021$44 per share December 31, 202249 per share The options were granted as compensation for executives’ services to be rendered over a two-year period beginning January 1, 2021. The Black-Scholes option pricing model determines total compensation expense to be $1508000. What amount of compensation expense should Sheridan recognize as a result of this plan for the year ended December 31, 2021 under the fair value method? A. $1508000 B. $2633000 C. $754000 D. $1658000
Witter House is a calendar-year firm with 400 million common shares outstanding throughout 2018 and 2019. As part of its executive compensation plan, at January 1, 2017, the company had issued 45 million executive stock options permitting executives to buy 45 million shares of stock for $14 within the next eight years, but not prior to January 1, 2020. The fair value of the options was estimated on the grant date to be $3 per option. In 2018, Witter House began granting employees stock awards rather than stock options as part of its equity compensation plans and granted 25 million restricted common shares to senior executives at January 1, 2018. The shares vest four years later. The fair value of the stock was $20 per share on the grant date. The average price of the common shares was $20 and $30 during 2018 and 2019, respectively. The stock options qualify for tax purposes as an incentive plan. The restricted stock does not. The company's net income was $250 million and $260 million…
On Jan. 1, 2020, Hufflepuff Industries, Inc. issues stock options for 100,000 shares to a regional manager. The options have an estimated fair value of $6 each. The provide additional incentive for the manager's achievement, the options are not exercisable unless the region revenue increase by 8% in three years. Hufflepuff initially estimates that it is probable that the goal will be achieved. How much compensation will be recorded in 2020, 2021, and 2022, the vesting period?
Q. M Company issued 99,000 stock options to key executives on January 1, 2021. The options must be exercised by December 31, 2023, and will expire on January 1, 2027. Each option entitles the holder to one share of $1 par ordinary stock for $12. On the date of award, an option-pricing model estimates the fair value of the options to be $4. What should M deduct as compensation expense in 2021?
In order to retain certain key executives, Wildhorse Corporation granted them incentive stock options on December 31, 2024. A total of 152000 options were granted at an option price of $35 per share. Market prices of the stock were as follows: December 31, 2025 December 31, 2026 The options were granted as compensation for executives' services to be rendered over a two-year period beginning January 1, 2025. The Black-Scholes option-pricing model determined total compensation expense to be $1501000. $44 per share 49 per share What amount of compensation expense should Wildhorse recognize as a result of this plan for the year ended December 31, 2025 under the fair value method? O $750500 $1653000 $1501000 $2622950
Microsoft Corporation's disclosure notes for the year ending June 30, 2020, Included the following regarding its $0.00000625 par common stock Employee Stock Purchase Plan-We have an ESPP for all eligible employees. Shares of our common stock may be purchased by employees at three-month intervals at 90% of the fair market value on the last trading day of each three-month period. Employees may purchase shares having a value not exceeding 15% of their gross compensation during an offering period. Employees purchased the following shares during the periods presented (Shares in millions) Year Ended June 30, Shares purchased i Average price per share 2020 2019 11 $142.22 $104.85 2018 15 $76.48 As of June 30, 2020, 96 million shares of our common stock were reserved for future issuance through the ESPP Required: Prepare the journal entry that summarizes Microsoft's employee share purchases for the year ending June 30, 2020 Note: If no entry is required for a transection/event, select "No…
Microsoft Corporation's disclosure notes for the year ending June 30, 2020, Included the following regarding its $0.00000625 par common stock Employee Stock Purchase Plan-We have an ESPP for all eligible employees. Shares of our common stock may be purchased by employees at three-month intervals at 90% of the fair market value on the last trading day of each three-month period. Employees may purchase shares having a value not exceeding 15% of their gross compensation during an offering period. Employees purchased the following shares during the periods presented (Shares in millions) Year Ended June 30, 2020 2019 11 $104.85 2018 Shares purchased Average price per share 13 $76.48 $142,22 As of June 30, 2020, 96 milion shares of our common stock were reserved for future issuance through the ESPP Required: Prepare the journal entry that summanzes Microsoft's employee share purchases for the year ending June 30, 2020 Note: If no entry is required for a transaction/event, select "No Journal…
Witter House is a calendar-year firm with 300 million common shares outstanding throughout 2018 and 2019.As part of its executive compensation plan, at January 1, 2017, the company had issued 30 million executivestock options permitting executives to buy 30 million shares of stock for $10 within the next eight years, but notprior to January 1, 2020. The fair value of the options was estimated on the grant date to be $3 per option.In 2018, Witter House began granting employees stock awards rather than stock options as part of its equitycompensation plans and granted 15 million restricted common shares to senior executives at January 1, 2018.The shares vest four years later. The fair value of the stock was $12 per share on the grant date. The averageprice of the common shares was $12 and $15 during 2018 and 2019, respectively.The stock options qualify for tax purposes as an incentive plan. The restricted stock does not. The company’snet income was $150 million and $160 million in 2018…
On January 1, 2019, a company granted 100,000 options to key executives. Each option allows the executive to purchase one share of the company’s $16 par value common stock at a price of $42 per share. The options were exercisable within a 2-year period beginning January 1, 2022. On the grant date, a fair value option-pricing model determines total compensation to be $300,000. On January 1, 2022, 6,000 options were exercised. In the journal entry to record the exercise, how much should be recorded for Paid-in Capital in Excess of Par – common stock?