A corporation has a stock option plan it awards to its executives. On January 1, Year 5, the board of directors granted 12,000 stock options, each of which permits the purchase of one share of stock at $15 per share, the current market price of the stock. The options are exercisable 4 years later on December 31, Year 8, as long as the executives are still employed. The options expire on December 31, Year 10. The fair value of each option on the grant date is $7. What is the compensation expense for Year 5 related to the stock options? O $60,000. O $45,000. O $21.000. O $28,000.
A corporation has a stock option plan it awards to its executives. On January 1, Year 5, the board of directors granted 12,000 stock options, each of which permits the purchase of one share of stock at $15 per share, the current market price of the stock. The options are exercisable 4 years later on December 31, Year 8, as long as the executives are still employed. The options expire on December 31, Year 10. The fair value of each option on the grant date is $7. What is the compensation expense for Year 5 related to the stock options? O $60,000. O $45,000. O $21.000. O $28,000.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:A corporation has a stock option plan it awards to its executives. On January 1, Year 5, the board of directors granted 12,000
stock options, each of which permits the purchase of one share of stock at $15 per share, the current market price of the
stock. The options are exercisable 4 years later on December 31, Year 8, as long as the executives are still employed. The
options expire on December 31, Year 10. The fair value of each option on the grant date is $7. What is the compensation
expense for Year 5 related to the stock options?
O $60,000.
O $45,000.
O $21.000.
$28,000.
Transcribed Image Text:A corporation has the following stock issued and outstanding:
Common stock, $1 par value, 10,000 shares originally issued for $20 per share.
. Preferred stock, $10 par value, 1,000 shares originally issued for $60 per share.
What is the total amount of Additional Paid-in Capital from the issuance of both classes of stock?
.
O $249,000.
O $260,000.
O $240,000.
O $519,000.
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