Executive stock options: A.are options to buy shares at a specified exercise price within a specified period of time. B.are options to sell shares at a specified exercise price within a specified period of time. C.are 100% expensed in the year during which options were being granted D.typically results a decrease in shareholder's equity value when exercised by executives O A

Executive stock options: A.are options to buy shares at a specified exercise price within a specified period of time. B.are options to sell shares at a specified exercise price within a specified period of time. C.are 100% expensed in the year during which options were being granted D.typically results a decrease in shareholder's equity value when exercised by executives O A

Financial Accounting Intro Concepts Meth/Uses

14th Edition

ISBN:9781285595047

Author:Weil

Publisher:Weil

Chapter15: Shareholders’ Equity: Capital Contributions And Distributions

Section: Chapter Questions

Problem 29P

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Alert Companys shareholders equity prior to any of the following events is as follows: The company is considering the following alternative items: 1. An 8% stock dividend on the common stock when it is selling for 30 per share. 2. A 30% stock dividend on the common stock when it is selling for 32 per share. 3. A special stock dividend to common shareholders consisting of 1 share of preferred stock for every 100 shares of common stock. The preferred stock and common stock are selling for 123 and 31 per share, respectively. 4. A 2-for-1 stock split on the common stock, reducing the par value to 5 per share (assume the same date for declaration and issuance). The market price is 30 per share on the common stock. 5. A property dividend to common shareholders consisting of 100 bonds issued by West Company. These bonds are carried on the Alert Company books as an available-for sale investment at a fair value of 48,000 (which is also its cost); it has a current value of 54,000. 6. A cash dividend, consisting of a normal dividend and a liquidating dividend, on both the preferred and the common stock. The 10% preferred dividend includes a 2% liquidating dividend, and the 2.30 per share common dividend includes a 0.30 per share liquidating dividend (separate liquidating dividend contra accounts should be used). Required: For each of the preceding alternative items: 1. Record (a) the journal entry at the date of declaration and (b) the journal entry at the date of issuance. 2. Compute the balances in the shareholders equity accounts immediately after the issuance (any gains or losses are to be reflected in the retained earnings balance; ignore income taxes).
Stockholders' Equity Terminology A list of terms and a list of definitions or examples are presented below. Make a list of the numbers 1 through 12 and match the letter of the most directly related definition or example with each number Definitions and Examples Capitalizes retained earnings. Shares issued minus treasury shares. Emerson Electric will pay a dividend to all persons holding shares of its common stock on December 15, 2019, even if they just bought the shares and sell them a few days later. The accumulated earnings over the entire life of the corporation that have not been paid out in dividends. Common Stock account balance divided by the number of shares issued. The state of Louisiana set an upper limit of 1,000,000 on the number of shares that Gumps Catch Inc. can issue. Shares that never earn dividends. Any changes to stockholders equity from transactions with no owners. A right to purchase stock at a specified future time and specified price. j. A stock issue that requires no journal entry. k. Shares that may earn guaranteed dividends. 1. On October 15, 2019, General Electric announced its intention to pay a dividend on common stock.
Fully vested incentive stock options exercisable at 62 per share to obtain 18,000 shares of common stock were outstanding during a period when the average market price of the common stock was 72 and the ending market price was 72. by how many shares will the assumed exercise of these options increase the weighted-average number of shares outstanding when calculating dlluted earning per share?
Fully vested incentive stock options exercisable at $56 per share to obtain 15,000 shares of common stock were outstanding during a period when the average market price of the common stock was $70 and the ending market price was $70. What will be the net increase in the weighted-average number of shares outstanding due to the assumed exercise of these options when calculating diluted earnings per share?
Victor, Inc. awarded 2,000 stock options to buy 2,000 common shares ($1 par) at an exercise price of $40 per share when the market price is $40 per share. The fair value of the options at the time of the award is equal to $100,000. The service period is 4 years. No forfeiture occurs and all options are exercised at the end of the service period. After the exercise of the options, total stockholder's equity (TSE) will change by the following amount: O TSE will increase by $80,000 Total. O TSE will increase by $100,000 Total. O TSE will increase by $180,000. O TSE will have a net $-0- change.
You have been provided with the following information for the year ended 30 June 2022 for ABCLtd:RNet profit for the year -R1 800 000Weighted average number of shares (WANOS) outstanding during the year-R 120 000Average fair value per share -R30.00Weighted average number of shares (WANOS) under option during the year -R25 000Exercise price for shares under option during the year -R28.00REQUIRED:Q.2.1 Explain the purpose and objective of disclosing diluted earnings per share.
Joe’s Fence Company issued 800 shares of no-par common stock for $7,200. Which of the following would occur if the stock has stated value of $2 per share? Select a Choice Below current question choices OptionA Increase Cash and increase Common Stock for $7,200. OptionB Increase Cash for $7,200 and increase Common Stock $1,600 and Paid-in Capital in Excess of Par $5,600. OptionC Increase Cash for $7,200 and increase Common Stock for $ 1,600 and Paid-in Capital in Excess of Stated Value for $5,600. OptionD Decrease Common Stock and decrease Cash for $7,200.
F- Prepare the necessary entries from 1/1/20-2/1/22 for the following events using the fair value method. If no entry is needed, write "No Entry Necessary." On 1/1/20, the stockholders adopted a stock option plan for top executives whereby each might receive rights to purchase up to 30,000 shares of common stock at $40 per share. The par value is $10 per share. On 2/1/20, options were granted to each of five executives to purchase 30,000 shares. The options were non-transferable and the executive had to remain an employee of the company to exercise the option. The options expire on 2/1/22. It is assumed that the options were for services performed equally in 2020 and 2021. The Black-Scholes option pricing model determines total compensation expense to be $3,200,000. At 2/1/22, four executives exercised their options. The fifth executive chose not to exercise his options, which therefore were forfeited.
On January 1 of Year 1, Holiday Inc. offered a stock option incentive plan to a top executive. The plan provided the executive 300 stock options for Holiday Inc. $1 par value, common stock at an option price of $15 per share through the expiration date of January 1 of Year 7. The fair value of the options based upon an option-pricing model on January 1 of Year 1, is $9,000. The market price at year-end of Holiday Inc. stock is $15 per share on January 1 of Year 1, and $18 on December 31 of Year 1. The requisite service period is 3 years. The options were not exercised due to the stock price remaining below $15 per share after the vesting period. Record the entry on January 1 of Year 7 for the expiration of the stock options. Note: If a line in a journal entry isn't required for the transaction, select "N/A—debit" and "N/A—credit" as the account names and leave the Dr. and Cr. answers blank (zero).
On January 1, 2020, Hage Corporation granted incentive stock options to purchase 26,000 of its common shares at $7 each. The options are exercisable after one year. The market price of common averaged $8 per share during the quarter ending on March 31, 2021. There was no change in the 220,000 shares of outstanding common stock during the quarter ended March 31, 2021. Net income for the quarter was $9,068. The number of shares to be used in computing diluted earnings per share for the quarter is: (Round your final answer to whole number.)
Razi Co. had net income for 2021 of $300,000. The average number of shares outstanding for the period was 200,000 shares. The average number of shares under outstanding options, at an option price of $30 per share is 12,000 shares. The average market price of the ordinary shares during the year was $36. What should Razi Co, report for diluted earnings per share for the year ended 2021? Select one: a.$1.50 $1.49 C.$1.42 d.1.43
LCI Cable Company grants 1 million performance stock options to key executives at January 1, 2018. Theoptions entitle executives to receive 1 million of LCI $1 par common shares, subject to the achievement ofspecific financial goals over the next four years. Attainment of these goals is considered probable initially andthroughout the service period. The options have a current fair value of $12 per option.Required:1. Prepare the appropriate entry when the options are awarded on January 1, 2018.2. Prepare the appropriate entries on December 31 of each year 2018–2021.3. Suppose at the beginning of 2020, LCI decided it is not probable that the performance objectives will be met.Prepare the appropriate entries on December 31 of 2020 and 2021.