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Buffalo Co compensates its executives with stock options. On January 1, 2021, it granted its executives 20, 000 stock options, with a strike price of $10 per share for their 2021 bonus. The fair market value of each option was estimated at $2 per share and the options vest over 5 years. What will Buffalo Co record in 2021 for stock option compensation expense? A. $10,000 B. $200,000 C $100,000 D. $40,000 E. None of the above

Buffalo Co compensates its executives with stock options. On January 1, 2021, it granted its executives 20, 000 stock options, with a strike price of $10 per share for their 2021 bonus. The fair market value of each option was estimated at $2 per share and the options vest over 5 years. What will Buffalo Co record in 2021 for stock option compensation expense? A. $10,000 B. $200,000 C $100,000 D. $40,000 E. None of the above

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Buffalo Co compensates its executives with stock options. On January 1, 2021, it granted its executives 20, 000 stock options, with a strike price of $10 per share for their 2021 bonus. The fair market value of each option was estimated at $2 per share and the options vest over 5 years. What will Buffalo Co record in 2021 for stock option compensation expense? A. $10,000 B. $200,000 C $100,000 D. $40,000 E. None of the above S
Transcribed Image Text:Buffalo Co compensates its executives with stock options. On January 1, 2021, it granted its executives 20, 000 stock options, with a strike price of $10 per share for their 2021 bonus. The fair market value of each option was estimated at $2 per share and the options vest over 5 years. What will Buffalo Co record in 2021 for stock option compensation expense? A. $10,000 B. $200,000 C $100,000 D. $40,000 E. None of the above S
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