In connection with a stock option plan for the benefit of key employees, Ward Corp. intends to distribute treasury shares when the options are exercised. These shares were bought in 2022 at P42 per share. On January 1, 2023, Ward granted stock options for 10,000 shares at P38 per share as additional compensation for services to be rendered over the next three years. The options are exercisable during a four-year period beginning January 1, 2026, by grantees still employed by Ward. Market price of Ward’s stock was P47 per share at the grant date. The fair value of a similar stock option with the same terms was P15 at the grant date. No stock options were terminated during 2023. In Ward’s December 31, 2023 statement of comprehensive income, determine the amount to be reported as compensation expense pertaining to the options
In connection with a stock option plan for the benefit of key employees, Ward Corp. intends to distribute treasury shares when the options are exercised. These shares were bought in 2022 at P42 per share. On January 1, 2023, Ward granted stock options for 10,000 shares at P38 per share as additional compensation for services to be rendered over the next three years. The options are exercisable during a four-year period beginning January 1, 2026, by grantees still employed by Ward. Market price of Ward’s stock was P47 per share at the grant date. The fair value of a similar stock option with the same terms was P15 at the grant date. No stock options were terminated during 2023. In Ward’s December 31, 2023 statement of comprehensive income, determine the amount to be reported as compensation expense pertaining to the options
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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- In connection with a stock option plan for the benefit of key employees, Ward Corp. intends to distribute treasury shares when the options are exercised. These shares were bought in 2022 at P42 per share. On January 1, 2023, Ward granted stock options for 10,000 shares at P38 per share as additional compensation for services to be rendered over the next three years. The options are exercisable during a four-year period beginning January 1, 2026, by grantees still employed by Ward. Market price of Ward’s stock was P47 per share at the grant date. The fair value of a similar stock option with the same terms was P15 at the grant date. No stock options were terminated during 2023. In Ward’s December 31, 2023 statement of comprehensive income, determine the amount to be reported as compensation expense pertaining to the options
ANSWER: 50,000
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