2. ABC Corporation (a public company) establishes an employee stock option plan on January 1, year 1. The plan allows its employees to acquire 10,000 shares of its P1 par value common stock at P52 per share, when the market price is also P52. The options may not be exercised until five years from the grant date. The grant-date fair value of an option with similar terms and conditions is P8.62. Compensation expense at the end of year 1 is Answer:

2. ABC Corporation (a public company) establishes an employee stock option plan on January 1, year 1. The plan allows its employees to acquire 10,000 shares of its P1 par value common stock at P52 per share, when the market price is also P52. The options may not be exercised until five years from the grant date. The grant-date fair value of an option with similar terms and conditions is P8.62. Compensation expense at the end of year 1 is Answer:

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 30P

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On January 2, 2019, Brust Corporation grants its new CFO 2,000 restricted share units. Each of the time-vested restricted share units entitles the CFO to receive one share of Brust common stock if she remains an employee of the company for 4 years. On January 2, 2019, shares of Brusts 1 par value common are trading at 29.50 per share. The company estimates that the CFO will complete all 4 years of required service with the company. Prepare the journal that Brust should make each year to account for the restricted share units.
7. ABC Corporation (a public company) establishes an employee stock option plan on January 1, year 1. The plan allows its employees to acquire 10,000 shares of its P1 par value common stock at P52 per share, when the market price is also P52. The options may not be exercised until five years from the grant date. The grant-date fair value of an option with similar terms and conditions is P8.62. When the option is exercised after the 5-year period, the resulting share premium is?
15. ABC Corporation (a public company) establishes an employee stock option plan on January 1, year 1. The plan allows its employees to acquire 10,000 shares of its P1 par value common stock at P52 per share, when the market price is also P52. The options may not be exercised until five years from the grant date. The grant-date fair value of an option with similar terms and conditions is P8.62. When the option is exercised after the 5-year period, the net increase in shareholders’ equity is?
2. On January 1, 2019, an entity granted 60,000 share options to employees. The share options vest at the end of three years provide the employees remain in service until then. The option price is P60 and the par value is P50. At the date of grant, the entity concluded that the fair value of the share options cannot be measured reliably. The share options can be exercised within one year after vesting. The share prices are P62 on December 31, 2019, P66 on December 31, 2020, P75 on December 31, 2021 and P85 on December 31, 2022. All options were exercised on December 31, 2022. • What is the compensation expense for 2021? 3. An entity began operations January 1, 2015 and reported the following net income or loss for five years of operations. 2015 P1 500 000 Loss 2016 1 300 000 Loss 2017 1 200 000 Loss 2018 4 500 000 Income 2019 9 000 000 Income On December 31, 2019, the capital accounts were: Preference share capital, P100
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On January 1st, 2021, Moon Corp. granted stock options to its senior executive officers. This is the only stock option plan that Moon offers and the details are as follows: Option to purchase: 10,000 common shares Option price per share: $33.00 Fair value per common share on date of grant: $25.40 Stock option expiration: December 31, 2028 Date when options are first exercisable: January 1, 2025 Total estimated compensation expense related to the options: $84,000 On January 1, 2023, 2,000 options were cancelled when one of the senior officers left the company. On January 1, 2026, 7,000 of the options were exercised when the fair value of the common shares was $36. The remaining stock options were allowed to expire. Assume that the entity follows ASPE and has decided not to include an estimate of forfeitures upon initial recognition of the compensation expense. Required: 1. Record all journal entries required for 2021. 2. Record all journal entries required for 2023. 3. Record the…
4. A company grants 100 Share appreciation rights (SAR), payable in cash, to an employee on 1/1/Y1. The predetermined amount for the SAR plan is P50 per right, and the market value of the stock is P55 on 12/31/Y1, P53 on 12/31/Y2, and P61 on 12/31/Y3. The plan had a two-year service period. Liability of SAR at year 3 is?
On November 1, 2025, Kingbird Company adopted a stock-option plan that granted options to key executives to purchase 25,500 shares of the company's 59 par value common stock. The options were granted on January 2, 2026, 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 $50, and the fair value option-pricing model determines the total compensation expense to be $382.500. All of the options were exercised during the year 2028: 17,000 on January 3 when the market price was $65, and 8,500 on May 1 when the market price was $76 a share. Prepare journal entries relating to the stock option plan for the years 2026, 2027, and 2028. Assume that the employee performs services equally in 2026 and 2027. (List all debit entries before credit entries. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is…
Date May 1, 2028 Account Titles and Explanation Debit Credit
On July 1, 2019, Windsor Company adopted a stock-option plan that granted options to key executives to purchase 86,000 shares of the company’s $1 par value common stock. The options were granted on January 1, 2020, and were exercisable 3 years after the date of grant if the grantee was still an employee of the company. The options expired 4 years from date of grant. The option price was set at $63, and the fair value option-pricing model determines the total compensation expense to be $612,000.All of the options were exercised February 1, 2023, when the market price was $75 a share.Prepare journal entries relating to the stock option plan for the years 2019 through 2023. Assume that the employee performs services equally in 2020, 2021 and 2022. (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 enter 0 for the amounts. Round intermediate calculations to 5 decimal places,…
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.
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