INTERMEDIATE ACCOUNTING(LL)-W/2 ACCESS
9th Edition
ISBN: 9781260180657
Author: SPICELAND
Publisher: MCG
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Chapter 19, Problem 19.6BE
To determine
Stock options: Stock options are the stock-based compensation plans provided in the form of an option to buy certain number of shares for a certain price during certain period.
Debit and credit rules:
- Debit an increase in asset account, increase in expense account, decrease in liability account, and decrease in
stockholders’ equity accounts. - Credit decrease in asset account, increase in revenue account, increase in liability account, and increase in stockholders’ equity accounts.
To journalize: The options exercised in the books of Corporation N
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Brief Exercise 19-6 (Algo) Stock options; exercise [L019-2]
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, $25 per share. The fair value of the options, estimated
by an appropriate option pricing model, is $2 per option. Suppose that the options are exercised on April 3, 2024, when the market
price is $31 per share.
Ignoring taxes, what journal entry will National record? (If no entry is required for a transaction/event, select "No journal entry
required" in the first account field. Enter your answers in millions (i.e., 10,000,000 should be entered as 10).)
X Answer is not complete.
No
Date
General Journal
Debit
Credit
1
April 03, 2024
Cash
25 x
Paid-in capital - stock options
25 X
Help
Save & E
Che
Problem 19-1 (Algo) Stock options; forfeiture; exercise [LO19-2]
On October 15, 2020, the board of directors of Ensor Materials Corporation approved a stock option plan for key executives. On
January 1, 2021, 30 million stock options were granted, exercisable for 30 million shares of Ensor's $1 par common stock. The options
are exercisable between January 1, 2024, and December 31, 2026, at 80% of the quoted market price on January 1, 2021, which was
$15. The fair value of the 30 million options, estimated by an appropriate option pricing model, is $5 per option. Ensor chooses the
option to recognize forfeitures only when they occur.
Ten percent (3 million) of the options were forfeited when an executive resigned in 2022. All other options were exercised on July 12,
2025, when the stock's price jumped unexpectedly to $30 per share.
Required:
1. When is Ensor's stock option measurement date?
2. Determine the compensation expense for the stock option plan in 2021.…
Question 3
On 6 July 2021, Falta Limited paid $300 to purchase a put option on Zebra Limited when the
market price per ordinary shares was $120.
The option gives Falta Limited to sell 500 shares at an exercise price of $120 and the option expires
on 1 February 2022.
Market price per share
$
Time value of put Option
$
Date
30 September 2021
31 December 2021
123
180
115
100
1 February 2022
112
30
Required:
Prepare the journal entries for Falta for the following dates:
(a)
On 6 July 2021 to record the investment in the put option.
(b)
On 30 September 2021 when Falta Limited prepared the financial statements.
(c)
On 31 December 2021 when Falta Limited prepared the financial statements.
(d)
On 1 February 2022 when Falta Limited settled the call option.
Chapter 19 Solutions
INTERMEDIATE ACCOUNTING(LL)-W/2 ACCESS
Ch. 19 - Prob. 19.1QCh. 19 - Prob. 19.2QCh. 19 - The Tax Code differentiates between qualified...Ch. 19 - Stock option (and other share-based) plans often...Ch. 19 - What is a simple capital structure? How is EPS...Ch. 19 - Prob. 19.6QCh. 19 - Blake Distributors had 100,000 common shares...Ch. 19 - Why are preferred dividends deducted from net...Ch. 19 - Prob. 19.9QCh. 19 - The treasury stock method is used to incorporate...
Ch. 19 - The potentially dilutive effect of convertible...Ch. 19 - How is the potentially dilutive effect of...Ch. 19 - Prob. 19.13QCh. 19 - If stock options and restricted stock are...Ch. 19 - Wiseman Electronics has an agreement with certain...Ch. 19 - Prob. 19.16QCh. 19 - When the income statement includes discontinued...Ch. 19 - Prob. 19.18QCh. 19 - Prob. 19.19QCh. 19 - (Based on Appendix B) LTV Corporation grants SARs...Ch. 19 - Prob. 19.1BECh. 19 - Prob. 19.2BECh. 19 - Stock options LO192 Under its executive stock...Ch. 19 - Prob. 19.4BECh. 19 - Prob. 19.5BECh. 19 - Prob. 19.6BECh. 19 - Prob. 19.7BECh. 19 - Prob. 19.8BECh. 19 - Prob. 19.9BECh. 19 - Performance-based options LO192 Refer to the...Ch. 19 - Prob. 19.11BECh. 19 - Prob. 19.12BECh. 19 - EPS; nonconvertible preferred shares LO197 At...Ch. 19 - Prob. 19.14BECh. 19 - Prob. 19.15BECh. 19 - Prob. 19.16BECh. 19 - Prob. 19.1ECh. 19 - Prob. 19.2ECh. 19 - Prob. 19.3ECh. 19 - Prob. 19.4ECh. 19 - Prob. 19.5ECh. 19 - Prob. 19.6ECh. 19 - Prob. 19.7ECh. 19 - Prob. 19.8ECh. 19 - Prob. 19.9ECh. 19 - Prob. 19.10ECh. 19 - Prob. 19.11ECh. 19 - EPS; shares issued; stock dividend LO195, LO196...Ch. 19 - Prob. 19.13ECh. 19 - EPS; stock dividend; nonconvertible preferred...Ch. 19 - EPS; net loss; nonconvertible preferred stock;...Ch. 19 - EPS; stock dividend; nonconvertible preferred...Ch. 19 - Prob. 19.17ECh. 19 - EPS; stock dividend; nonconvertible preferred...Ch. 19 - EPS; stock dividend; nonconvertible preferred...Ch. 19 - EPS; shares issued; stock options LO196 through...Ch. 19 - EPS; convertible preferred stock; convertible...Ch. 19 - Prob. 19.22ECh. 19 - Prob. 19.23ECh. 19 - Prob. 19.24ECh. 19 - Prob. 19.25ECh. 19 - EPS; concepts; terminology LO195 through LO1913...Ch. 19 - FASB codification research LO192 The FASB...Ch. 19 - Prob. 19.28ECh. 19 - Prob. 19.29ECh. 19 - Prob. 19.30ECh. 19 - Restricted stock units; cash settlement Appendix...Ch. 19 - Stock options; forfeiture; exercise LO192 On...Ch. 19 - Stock options; graded vesting LO192 January 1,...Ch. 19 - Stock options; graded vesting; measurement using a...Ch. 19 - Stock options; graded vesting; IFRS LO192, LO1914...Ch. 19 - Prob. 19.5PCh. 19 - Prob. 19.6PCh. 19 - Prob. 19.7PCh. 19 - Prob. 19.8PCh. 19 - EPS from statement of retained earnings LO194...Ch. 19 - EPS from statement of shareholders equity LO194...Ch. 19 - EPS; non convertible preferred stock; treasury...Ch. 19 - EPS; non convertible preferred stock; treasury...Ch. 19 - EPS; non convertible preferred stock; treasury...Ch. 19 - EPS; convertible preferred stock; convertible...Ch. 19 - EPS; antidilution LO194 through LO1910, LO1913...Ch. 19 - EPS; convertible bonds; treasury shares LO194...Ch. 19 - Prob. 19.17PCh. 19 - Prob. 19.18PCh. 19 - EPS; options; restricted stock; additional...Ch. 19 - Prob. 19.1BYPCh. 19 - Communication Case 192 Stock options; basic...Ch. 19 - Prob. 19.3BYPCh. 19 - Real World Case 195 Share-based plans; Walmart ...Ch. 19 - Prob. 19.6BYPCh. 19 - Prob. 19.7BYPCh. 19 - Analysis Case 198 EPS concepts LO194 through...Ch. 19 - Prob. 19.9BYPCh. 19 - Prob. 19.10BYPCh. 19 - Communication Case 1911 Dilution LO199 I thought...Ch. 19 - Real World Case 1912 Reporting EPS; discontinued...Ch. 19 - Analysis Case 1913 Analyzing financial statements;...Ch. 19 - Analysis Case 1915 Kelloggs EPS; PE ratio;...Ch. 19 - Prob. 19.16BYPCh. 19 - Prob. 1CCTCCh. 19 - Air FranceKLM Case IFRS LO199 Air FranceKLM (AF),...
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