Identifying and Analyzing Financial Statement Effects of Stock-Based Compensation The stockholders' equity of Aspen Corporation at December 31, 2019, follows. 7% Preferred stock, $100 par value, 20,000 shares authorized; 2,400 shares issued and outstanding Common stock, $15 par value, 300,000 shares authorized; 18.000shares issued and outstanding Paid-in capital in excess of par value-preferred stock Paid-in capital in excess of par value-common stock Retained earnings Total stockholders' equity The following transactions, among others, occurred during the following year. • Employees exercised 7,200 stock options that were granted in 2015 and had a three-year vesting period. These options had an estimated fair value of $2 at the grant date, and an exercise price of $16. There were no other vested or unvested options after this exercise. • Awarded 600 shares of stock to new executives, when the stock price was $36. • Sold 6,000 shares to employees under the company-wide stock purchase plan. Under the plan, employees purchased the shares at a 10% discount when the stock price was $33 per share. • Granted 24,000 new stock options, with a strike price of $34 and an estimated fair value of $6. The options vest over three years. Start of year Stock options exercised Stock award Employee stock purchase Stock options granted Net income End of year Required Prepare the December 31, 2019, statement of stockholders' equity assuming that the company reports 2019 pretax income of $289,800 before the effects of stock-based compensation. Assume the company has a 35% tax rate. $ $ Shares Issued Preferred Stock $ $240,000 $ 270,000 21,600 216,000 195,000 $942,600 ASPEN CORPORATION Statement of Stockholders' Equity par $100 $ Paid-in Capital in Excess $ S S Shares Issued Common Stock $ $ Par $15 Paid-in Capital in Excess $ $ Retained Earnings $ $
Identifying and Analyzing Financial Statement Effects of Stock-Based Compensation The stockholders' equity of Aspen Corporation at December 31, 2019, follows. 7% Preferred stock, $100 par value, 20,000 shares authorized; 2,400 shares issued and outstanding Common stock, $15 par value, 300,000 shares authorized; 18.000shares issued and outstanding Paid-in capital in excess of par value-preferred stock Paid-in capital in excess of par value-common stock Retained earnings Total stockholders' equity The following transactions, among others, occurred during the following year. • Employees exercised 7,200 stock options that were granted in 2015 and had a three-year vesting period. These options had an estimated fair value of $2 at the grant date, and an exercise price of $16. There were no other vested or unvested options after this exercise. • Awarded 600 shares of stock to new executives, when the stock price was $36. • Sold 6,000 shares to employees under the company-wide stock purchase plan. Under the plan, employees purchased the shares at a 10% discount when the stock price was $33 per share. • Granted 24,000 new stock options, with a strike price of $34 and an estimated fair value of $6. The options vest over three years. Start of year Stock options exercised Stock award Employee stock purchase Stock options granted Net income End of year Required Prepare the December 31, 2019, statement of stockholders' equity assuming that the company reports 2019 pretax income of $289,800 before the effects of stock-based compensation. Assume the company has a 35% tax rate. $ $ Shares Issued Preferred Stock $ $240,000 $ 270,000 21,600 216,000 195,000 $942,600 ASPEN CORPORATION Statement of Stockholders' Equity par $100 $ Paid-in Capital in Excess $ S S Shares Issued Common Stock $ $ Par $15 Paid-in Capital in Excess $ $ Retained Earnings $ $
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Identifying and Analyzing Financial Statement Effects of Stock-Based Compensation
The stockholders' equity of Aspen Corporation at December 31, 2019, follows.
7% Preferred stock, $100 par value, 20,000 shares authorized;
2,400 shares issued and outstanding
Common stock, $15 par value, 300,000 shares authorized;
18,000shares issued and outstanding
Paid-in capital in excess of par value-preferred stock
Paid-in capital in excess of par value-common stock
Retained earnings
Total stockholders' equity
The following transactions, among others, occurred during the following year.
• Employees exercised 7,200 stock options that were granted in 2015 and had a three-year vesting period. These options had an estimated fair value of $2 at the grant date, and an exercise price of $16. There
were no other vested or unvested options after this exercise.
Awarded 600 shares of stock to new executives, when the stock price was $36.
•Sold 6,000 shares to employees under the company-wide stock purchase plan. Under the plan, employees purchased the shares at a 10% discount when the stock price was $33 per share.
. Granted 24,000 new stock options, with a strike price of $34 and an estimated fair value of $6. The options vest over three years.
Start of year
Stock options exercised
Stock award
Employee stock purchase
Stock options granted
Net income
End of year
Required.
Prepare the December 31, 2019, statement of stockholders' equity assuming that the company reports 2019 pretax income of $289,800 before the effects of stock-based compensation. Assume the company has
a 35% tax rate.
$
Shares
Issued
Preferred Stock
$
$
$240,000
ASPEN CORPORATION
Statement of Stockholders' Equity
par $100
270,000
21,600
216,000
195,000
$942,600
$
Paid-in
Capital in
Excess
$
S
S
Shares
Issued
Common Stock
Par $15
$
$
Paid-in
Capital in
Excess
$
$
Retained Earnings
$
$
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