How much is the excessive tax benefits to be credited to tax expense on January 2, 2019 according to the ASU 2016-09?Answer is $90 million. Please explain the reasoning and calculations million options are expected to vest. On January 2, 2019, all 12 million vested options areexercised when the stock price is $60. The applicable tax rate for all periods is 30%. Thecompany has sufficient taxable income for the stock option tax deductions to reduce incometaxes payable in all periods. Questions 20 to 23 are based on the following information:On January 1, 2016, Telespace Inc. grants 12 million stock options to its employees. Thestock options have exercise price of $20, which is equal to the grant-date price. All optionswill vest in three years. The grant date fair value of the options is $15 per option. All 12

Stock based compensation is the type of compensation or the option which are given to the employees…

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How much is the excessive tax benefits to be credited to tax expense on January 2, 2019 according to the ASU 2016-09?

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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Question

How much is the excessive tax benefits to be credited to tax expense on January 2, 2019 according to the ASU 2016-09? Answer is $90 million. Please explain the reasoning and calculations

million options are expected to vest. On January 2, 2019, all 12 million vested options are
exercised when the stock price is $60. The applicable tax rate for all periods is 30%. The
company has sufficient taxable income for the stock option tax deductions to reduce income
taxes payable in all periods.

Questions 20 to 23 are based on the following information:
On January 1, 2016, Telespace Inc. grants 12 million stock options to its employees. The
stock options have exercise price of $20, which is equal to the grant-date price. All options
will vest in three years. The grant date fair value of the options is $15 per option. All 12

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