How much is the excessive tax benefits to be credited to tax expense on January 2, 2019 according to the ASU 2016-09?Answer is $90 million. Please explain the reasoning and calculations million options are expected to vest. On January 2, 2019, all 12 million vested options areexercised when the stock price is $60. The applicable tax rate for all periods is 30%. Thecompany has sufficient taxable income for the stock option tax deductions to reduce incometaxes payable in all periods. Questions 20 to 23 are based on the following information:On January 1, 2016, Telespace Inc. grants 12 million stock options to its employees. Thestock options have exercise price of $20, which is equal to the grant-date price. All optionswill vest in three years. The grant date fair value of the options is $15 per option. All 12

Stock based compensation is the type of compensation or the option which are given to the employees…

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Business

Accounting

How much is the excessive tax benefits to be credited to tax expense on January 2, 2019 according to the ASU 2016-09?

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, 2019, Phoenix Corporation adopts a performance-based share option plan for 25 executives, with the number of shares based on the yearly increase in sales. At the end of 2019, based on a 10% increase in sales, it expects that each executive will be granted 150 options and that the fair value of an option expected to vest is 15.75. Phoenix expects a turnover rate of 15% over the 3-year service period. Determine the compensation expense for 2019 for this plan.
On November 1, 2017, Windsor Company adopted a stock-option plan that granted options to key executives to purchase 19,000 shares of the company’s $10 par value common stock. The options were granted on January 2, 2018, and were exercisable 2 years after the date of grant if the grantee was still an employee of the company. The options expired 6 years from date of grant. The option price was set at $40, and the fair value option-pricing model determines the total compensation expense to be $328,000. All of the options were exercised during the year 2020: 4,750 on January 3 when the market price was $67, and 14,250 on May 1 when the market price was $77 a share. Prepare journal entries relating to the stock option plan for the years 2018, 2019, and 2020. Assume that the employee performs services equally in 2018 and 2019. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and…
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On January 1, 2020, Waldorf Corporation granted 40,000 options to key executives. Each option allows the executive to purchase one share of Waldorf’s common shares at a price of $30 per share. The options were exercisable within a two–year period beginning January 1, 2022, if the grantee was still employed by the company at the time of the exercise. On the grant date, Waldorf’s shares were trading at $25 per share, and a fair value options pricing model determined total compensation to be $1,680,000. Management has assumed that there will be no forfeitures because they do not expect any of the key executives to leave. On May 1, 2022, 12,000 options were exercised when the market price of Waldorf’s shares was $34 per share. The remaining options lapsed in 2023 because executives decided not to exercise them. Management was indeed correct in their assumption regarding forfeitures in that all executives remained with the company. Assume that Waldorf follows IFRS. Prepare the…
On December 31, 2016, Sedona Inc. granted 160,000 options to key executives. Each option allows the executive to purchase one common share at a price of $6. The options were exercisable beginning January 1, 2019, if the grantee was still employed by the company at the time of the exercise, and expire on December 31, 2020. On the grant date, shares were trading at $6 per share, and a fair value options pricing model determined total compensation to be $80,000. On May 1, 2019, 120,000 options were exercised when the market price of the shares was $7 per share. The remaining options lapsed on December 31, 2020 because the share price declined below $6. Assume that the entity follows IFRS. Prepare the necessary journal entries related to the stock option plan for the years ended December 31, 2016, through 2020
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On January 1, 2017, Barwood Corporation granted 5,000 options to executives. Each option entitles the holder to purchase one share of Barwood’s $5 par value common stock at $50 per share at any time during the next 5 years. The market price of the stock is $65 per share on the date of grant. The fair value of the options at the grant date is $150,000. The period of benefit is 2 years. Prepare Barwood’s journal entries for January 1, 2017, and December 31, 2017 and 2018.
On January 1, 2019, Nichols Corporation granted 10,000 options to key executives. Each option allows the executive to purchase one share of Nichols' $5 par value common stock at a price of $20 per share. The options were exercisable within a 2-year period beginning January 1, 2021, if the grantee is still employed by the company at the time of the exercise. On the grant date, Nichols' stock was trading at $25 per share, and a fair value option-pricing model determines total compensation to be $400,000. On May 1, 2021, 8,000 options were exercised when the market price of Nichols' stock was $30 per share. The remaining options lapsed in 2023 because executives decided not to exercise their options. Instructions Prepare the necessary journal entries related to the stock option plan for the years 2019 through 2023.
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On January 1, 2016, Adams-Meneke Corporation granted 25 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, 2018 (the vesting date). The exercise price is the market price of the shares on the date of grant, currently $10 per share. The fair value of the options, estimated by an appropriate option pricing model, is $3 per option. Required: 1. Determine the total compensation cost pertaining to the options on January 1, 2016. 2. Prepare the appropriate journal entry to record compensation expense on December 31, 2016. 3. Unexpected turnover during 2017 caused the forfeiture of 6% of the stock options. Determine the adjusted compensation cost, and prepare the appropriate journal entry(s) on December 31, 2017 and 2018.
On January 1, 2010, Barwood Corporation granted 5,000 options to executives. Each option entitles the holder to purchase one share of Barwood’s $5 par value common stock @ $50 per share at anytime during the next 5 years. The market price of the stock is $65 per share on the date of the grant. The period of benefit is 2 years. The Black – Scholes option pricing model determines total compensation expense to be $150,000. All options were excerised on December 31, 2012. Prepare Barwood’s journal entries for January 1, 2010, December 31, 2010, 2011, and 2012, using the fair value method.