please answer correct this time with all working thanks Now assume that the market price of Amazon stock the grant date was $43 per share. Prepare the journal entries for the firstyear of the stock-option plan. (List all debit entries before credit entries. Credit account titles are automatically indented when amount isentered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Record entriesin the order displayed in the problem statement.)Date1/1/2512/31/25Account Titles and ExplanationUnearned CompensationCommon StockCompensation ExpenseUnearned CompensationDebit36,9807,396Credit36. Assume that Amazon.com has a stock-option plan for top management. Each stock option represents the rightto purchase a share of Amazon $1 par value common stock in the future at a price equal to the fair value of thestock at the date of the grant. Amazon has 5,300 stock options outstanding, which were granted at thebeginning of 2025. The following data relate to the option grant.Exercise price for optionsMarket price at grant date (January 1, 2025)Fair value of options at grant date (January 1, 2025)Service period$42$42$65 years

Employee stock option is a financial compensation provided to the employees of the organization.…

Answered: Now assume that the market price of…

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 18E

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Assume that Amazon.com has a stock-option plan for top management. Each stock option represents the right to purchase a share of Amazon $1 par value common stock in the future at a price equal to the fair value of the stock at the date of the grant. Amazon has 5,000 stock options outstanding, which were granted at the beginning of 2020. The following data relate to the option grant. Exercise price for options 1$40 Market price at grant date (January 1, 2020) 1$40 Fair value of options at grant date (January 1, 2020) 1$6 Service period 15 years Instructions a. Prepare the journal entry(ies) for the first year of the stock-option plan. b. Prepare the journal entry(ies) for the first year of the plan assuming that, rather than options, 700 shares of restricted stock were granted at the beginning of 2020. c. Now assume that the market price of Amazon stock on the grant date was $45 per share. Repeat the requirements for (a) and (b). d. Amazon would like to…
Walters Audio Visual Inc. offers an incentive stock option plan to its regional managers. On January 1, 2021, options were granted for 40 million $1 par common shares. The exercise price is the market price on the grant date—$8 per share. Options cannot be exercised prior to January 1, 2023, and expire December 31, 2027. The fair value of the 40 million options, estimated by an appropriate option pricing model, is $1 per option. Prepare the appropriate journal entry to record the exercise of 75% of the options on March 12, 2023, when the market price is $9 per share and the entry on December 31, 2027, when the remaining options that have vested expire without being exercised. Record expiration of options.
Assume that TPL has a stock-option plan for top management. Each stock option represents the right to purchase a share of TPL $1 par value common stock in the future at a price equal to the fair value of the stock at the date of the grant. TPL has 75,0 00 stock options outstanding, which were granted at the beginning of 2020. The following data relate to the option grant: Exercise price for options $31; Market price at grant date (January 1, 2020) $31; Fair value of options at grant date (January 1, 2020) $2; Service period 4 years. Prepare the journal entry (ies) for the first year of the plan. Prepare the journal entry (ies) for the first year of the plan assuming that, rather than options, 2,500 shares of restricted stock were granted at the beginning of 2020. Now assume that the market price of TPL stock on the grant was $35 per share. Repeat the requirements for (a) and (b). TPL eould like to implement an employee stock-purchase plan for rank-and-file employees,but it would like…
Newmont Corp grants stock options to its top executives. On January 1, 2021, 24 million options were granted, each giving the executive owning them the right to acquire five $1 par common shares. The exercise price is the market price on the grant date – $30 per share ($120 per option). Options vest on January 1, 2025. They cannot be exercised before that date and will expire on December 31, 2027. The fair value of the 24 million options, estimated by an appropriate option pricing model, is $42 per option. Ignore income tax. Newmont's compensation expense in 2021 for these stock options was: (Round your answer to nearest whole dollar amount.) rev: 04_13_2020_QC_CS-207906 Multiple Choice $504 million. $1,008 million. $252 million. $0.
On November 1, 2020, Ayayai Company adopted a stock-option plan that granted options to key executives to purchase 27,300 shares of the company’s $10 par value common stock. The options were granted on January 2, 2021, 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 $30, and the fair value option-pricing model determines the total compensation expense to be $409,500.All of the options were exercised during the year 2023: 18,200 on January 3 when the market price was $68, and 9,100 on May 1 when the market price was $78 a share.Prepare journal entries relating to the stock option plan for the years 2021, 2022, and 2023. Assume that the employee performs services equally in 2022 and 2023.
Under its executive stock option plan, Sorensen Corporation granted options on January 1, 2024, that permit executives to purchase 31 million of the company's $1 par common shares within the next seven years, but not before December 31, 2026 (the vesting date). The exercise price is the market price of the shares on the date of grant, $19 per share. The fair value of the options, estimated by an appropriate option pricing model, is $4 per option. No forfeitures are anticipated. The options expired in 2030 without being exercised. By what amount will Sorensen's shareholders' equity be increased as a result of having granted the options?
Walters Audio Visual Inc. offers an incentive stock option plan to its regional managers. On January 1, 2021, options were granted for 72 million $1 par common shares. The exercise price is the market price on the grant date—$8 per share. Options cannot be exercised prior to January 1, 2023, and expire December 31, 2027. The fair value of the 72 million options, estimated by an appropriate option pricing model, is $1 per option. Required: 1. Determine the total compensation cost pertaining to the incentive stock option plan.2. to 5. Prepare the appropriate journal entries to record compensation expense on December 31, 2021 and 2022. Prepare the appropriate journal entry to record the exercise of 75% of the options on March 12, 2023, when the market price is $9 per share and the entry on December 31, 2027, when the remaining options that have vested expire without being exercised.
On January 1, 2024, 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, 2026 (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 policy is to estimate forfeitures. No forfeitures are anticipated. Ignore taxes. Required: Determine the total compensation cost pertaining to the options on January 1, 2024. Prepare the appropriate journal entry to record compensation expense on December 31, 2024. Unexpected turnover during 2025 caused an estimate of the forfeiture of 10% of the stock options. Prepare the appropriate journal entry(s) on December 31, 2025 and 2026 in response to the new estimate.
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…
Under its executive stock option plan, National Corporation granted 30 million options on January 1, 2021, that permit executives to purchase 30 million of the company’s $1 par common shares within the next six years, but not before December 31, 2023 (the vesting date). The exercise price is the market price of the shares on the date of grant, $31 per share. The fair value of the options, estimated by an appropriate option pricing model, is $4 per option. Suppose that the options are exercised on April 3, 2024, when the market price is $38 per share. Ignoring taxes, what journal entry will National record? Record entry for options exercised on April 3, 2024, when the market price is $38 per share.
On November 1, 2020, Tamarisk Company adopted a stock-option plan that granted options to key executives to purchase 38,400 shares of the company’s $9 par value common stock. The options were granted on January 2, 2021, 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 $30, and the fair value option-pricing model determines the total compensation expense to be $576,000.All of the options were exercised during the year 2023: 25,600 on January 3 when the market price was $64, and 12,800 on May 1 when the market price was $75 a share.Prepare journal entries relating to the stock option plan for the years 2021, 2022, and 2023. Assume that the employee performs services equally in 2022 and 2023.
On November 1, 2017, Marigold Company adopted a stock-option plan that granted options to key executives to purchase 21,000shares 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 $39, and the fair value option-pricing model determines the total compensation expense to be $309,000. All of the options were exercised during the year 2020: 5,250 on January 3 when the market price was $66, and 15,750 on May 1 when the market price was $78 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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