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of the company's S10 par common stock at an option price of 530 per share. The market value of the tok Part S Variews Quetons-Be sure te circle your final anveer 12/31201 w 530 per share The Back-Scholes option pricing model determined that cach option had value of $7. The options become exercisable on Janry 1, 2022, and represent compensation for executive 1. What was the intrinsie value of the options when they were granted oe December 31,20187 left the company and the market value of the stock has increased to $32 per share services ever a three-year period beginning January 1, 2019. At December 31, 2019 none of the executives A On December 31, 201, Free Company graed 15,000 options to its ecutives to purchase 15000

of the company's S10 par common stock at an option price of 530 per share. The market value of the tok Part S Variews Quetons-Be sure te circle your final anveer 12/31201 w 530 per share The Back-Scholes option pricing model determined that cach option had value of $7. The options become exercisable on Janry 1, 2022, and represent compensation for executive 1. What was the intrinsie value of the options when they were granted oe December 31,20187 left the company and the market value of the stock has increased to $32 per share services ever a three-year period beginning January 1, 2019. At December 31, 2019 none of the executives A On December 31, 201, Free Company graed 15,000 options to its ecutives to purchase 15000

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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12/31201 was $30 per share. The Black-Scholes opticn pricing model determined that each option had a value of $7. The options become exercisable on January 1, 2022, and represent compensation for executives services over a three-year period beginning January 1, 2019. At December 31, 2019 none of the executives had A On December 31, 2018, Free Company granted 15,000 options to its exocutive's to purchase 15,000 of the company's S10 par common tock at an option price of $30 per share. The market value of the stock left the company and the market value of the stock has increased to $32 per share. Part S: Various Questions-Be sure te circle your final anseer * what was the intrinsie value of the options when they were granted on December 31. 201 - What is the Compensation Expense for the year ended December 31, 2019 as a result of this transacoe accordance with US GAAP? 3. Indicate below the impact of your 12/31/2019 joumal entry on the financial statement template below Stockholders' Paid-in Capital Equity Retained Net Assets Liabilities in Excess Earnings Income (APIC) 4. On January 1, 2022 when the stock was trading at $35 per share in the market, 10,000 of the options were exercised. Prepare the journal entry below that would be made:
Transcribed Image Text:12/31201 was $30 per share. The Black-Scholes opticn pricing model determined that each option had a value of $7. The options become exercisable on January 1, 2022, and represent compensation for executives services over a three-year period beginning January 1, 2019. At December 31, 2019 none of the executives had A On December 31, 2018, Free Company granted 15,000 options to its exocutive's to purchase 15,000 of the company's S10 par common tock at an option price of $30 per share. The market value of the stock left the company and the market value of the stock has increased to $32 per share. Part S: Various Questions-Be sure te circle your final anseer * what was the intrinsie value of the options when they were granted on December 31. 201 - What is the Compensation Expense for the year ended December 31, 2019 as a result of this transacoe accordance with US GAAP? 3. Indicate below the impact of your 12/31/2019 joumal entry on the financial statement template below Stockholders' Paid-in Capital Equity Retained Net Assets Liabilities in Excess Earnings Income (APIC) 4. On January 1, 2022 when the stock was trading at $35 per share in the market, 10,000 of the options were exercised. Prepare the journal entry below that would be made:
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