Please do not give solution in image format thanku Pastore Incorporated granted options for 1million shares of its $1 par common stock atthe beginning of the current year. Theexercise price is $34 per share, which wasalso the market value of the stock on thegrant date. The fair value of the optionswas estimated at $7.50 per option.What would be the total compensationindicated by these options?$34.0 million$26.5 million$60.5 million$7.5 million

A stock option gives a right to the employees to buy the shares of a company at a predetermined…

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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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Convertible Preferred Stock On January 2, 2019, Bray Corporation issues 900 shares of 100 par convertible preferred stock for 117 per share. On January 7, 2020, all the preferred shareholders convert their shares to common stock. Required: 1. Prepare the January 2, 2019, journal entry to record the issuance of the preferred stock. 2. Prepare the January 7, 2020, journal entry to record the conversion, assuming the preferred stock contract states that: a. each share of preferred stock is convertible into 7 shares of 10 par common stock b. each share of preferred stock is convertible into 12 shares of 10 par common stock
Waseca Company had 5 convertible securities outstanding during all of 2019. It paid the appropriate interest (and amortized any related premium or discount using the straight line method) and dividends on each security during 2019. Each of the convertible securities is described in the following table: Additional data: Net income for 2019 totaled 119,460. The weighted average number of common shares outstanding during 2019 was 40,000 shares. No share options or warrants arc outstanding. The effective corporate income tax rate is 30%. Required: 1. Prepare a schedule that lists the impact of the assumed conversion of each convertible security on diluted earnings per share. 2. Prepare a ranking of the order in which each of the convertible securities should be included in diluted earnings per share. 3. Compute basic earnings per share. 4. Compute diluted earnings per share. 5. Indicate the amount(s) of the earnings per share that Waseca would report on its 2019 income statement.
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.

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What would be the total compensation indicated by these options? $34.0 million $26.5 million $60.5 million