Olde Corporation provides an executive stock option plan. Under the plan, the company granted options on January 1, 2024, thatpermit executives to acquire 2.5 million of the company's $1 par value common shares within the next five years, but not beforeDecember 31, 2025 (the vesting date). The exercise price is the market price of the shares on the date of the grant, $13 per share. Thefair value of the options, estimated by an appropriate option pricing model, is $2 per option. No forfeitures are anticipated Ignoretaxes.Required:1. Determine the total compensation cost pertaining to the options, assuming the fair value approach has been selected.2. & 4. Prepare the appropriate journal entries (if any).Complete this question by entering your answers in the tabs below.Req 1Reg 2 to 4Determine the total compensation cost pertaining to the options, assuming the fair value approach has been selected.Note: Enter your answer in millions rounded to 2 decimal places (i.e., 5,500,000 should be entered as 5.50).Total compensation costmillion< R1Req 2 to 4 > Olde Corporation provides an executive stock option plan. Under the plan, the company granted options on January 1, 2024, thatpermit executives to acquire 2.5 million of the company's $1 par value common shares within the next five years, but not beforeDecember 31, 2025 (the vesting date). The exercise price is the market price of the shares on the date of the grant, $13 per share. Thefair value of the options, estimated by an appropriate option pricing model, is $2 per option. No forfeitures are anticipated Ignoretaxes.Required:1. Determine the total compensation cost pertaining to the options, assuming the fair value approach has been selected.2. & 4. Prepare the appropriate journal entries (if any).Complete this question by entering your answers in the tabs below.Req 1Reg 2 to 4Determine the total compensation cost pertaining to the options, assuming the fair value approach has been selected.Note: Enter your answer in millions rounded to 2 decimal places (i.e., 5,500,000 should be entered as 5.50).Total compensation costmillion< R1Req 2 to 4 >

A Stock Option Plan, additionally referred to as an Employee Stock Option Plan (ESOP) or Equity…

Olde Corporation provides an executive stock option plan. Under the plan, the company granted options on January 1, 2024, that permit executives to acquire 2.5 million of the company's $1 par value common shares within the next five years, but not before December 31, 2025 (the vesting date). The exercise price is the market price of the shares on the date of the grant, $13 per share. The fair value of the options, estimated by an appropriate option pricing model, is $2 per option. No forfeitures are anticipated. Ignore taxes. Required: 1. Determine the total compensation cost pertaining to the options, assuming the fair value approach has been selected. 2. & 4. Prepare the appropriate journal entries (if any). Complete this question by entering your answers in the tabs below. Reg 2 to 4 Determine the total compensation cost pertaining to the options, assuming the fair value approach has been selected. Note: Enter your answer in millions rounded to 2 decimal places (i.e., 5,500,000 should be entered as 5.50). Total compensation cost million Req 1

Olde Corporation provides an executive stock option plan. Under the plan, the company granted options on January 1, 2024, that permit executives to acquire 2.5 million of the company's $1 par value common shares within the next five years, but not before December 31, 2025 (the vesting date). The exercise price is the market price of the shares on the date of the grant, $13 per share. The fair value of the options, estimated by an appropriate option pricing model, is $2 per option. No forfeitures are anticipated. Ignore taxes. Required: 1. Determine the total compensation cost pertaining to the options, assuming the fair value approach has been selected. 2. & 4. Prepare the appropriate journal entries (if any). Complete this question by entering your answers in the tabs below. Reg 2 to 4 Determine the total compensation cost pertaining to the options, assuming the fair value approach has been selected. Note: Enter your answer in millions rounded to 2 decimal places (i.e., 5,500,000 should be entered as 5.50). Total compensation cost million Req 1

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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value of the stock option is P90 if the exercise price is P180. If the exercise price is the exercise price will be P180. On Jan. 1, 2018, the entity estimated that the fair PROBLEM 8-7 On Jan. 1, 2018, TOMAS COMPANY granted 5,000 common stock options to the CEO, conditional upon the executive's remaining in the entity's employ until the end of 2020. The par value per share is P100 and the exercise price is P240. However, if earnings increase by at least 10% per year over the 3-year period, P240, the fair value of the stock option is P80. The carnings of the company increased over the 3-year period as follows: 2018. .10% 2019.. 2020.. .11% . 3% REQUIRED: Compute the compensation expense for 2018, 2019, and 2020 as a result of the stock options. 2. Prepare journal entries related to the stock options. PROBLEM 8-8 On Jan. 1, 2018, JORGE COMPANY granted 20 stock options to each of the 1,000 employees. Each grant is conditional upon the employee remaining in service for three (3) years.…
Now assume that the market price of Amazon stock on the grant date was $47 per share. Prepare the journal entries for the first year of the plan assuming that, rather than options, 710 shares of restricted stock were granted at the beginning of 2020. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.) Date Account Titles and Explanation Debit Credit >
Under its executive stock option plan, N Corporation granted options on January 1, 2021, that permit executives to purchase 15 million of the company's $1 par common shares within the next eight years, but not before December 31, 2023 (the vesting date). The exercise price is the market price of the shares on the date of grant, $18 per share. The fair value of the options to buy each share, estimated by an appropriate option pricing model on the date of grant, is $4 per option. No forfeitures are anticipated. Ignoring taxes, what is the effect on reported earnings in the year after the options are granted to executives? O $0 O $20 million O $60 million O $90 million
Bells, Inc.'s board authorized 150,000 stock options for the company's design team. The options can only be used to purchase shares of Bells, Inc's common stock for $9 per share and will vest in 3 years. Assuming that the options were authorized on January 1st of 2023, that the fair value of the options is $6, and that the company's tax rate is 20%, what will the amount of the net tax effect of these options in 2023? (NIE 15)$300,000$120,000$180,000$60,000
Pastore Incorporated granted options for 1 million shares of its $1 par common stock at the beginning of the current year. The exercise price is $31 per share, which was also the market value of the stock on the grant date. The fair value of the options was estimated at $9.00 per option. What would be the total compensation indicated by these options?
At January 1, 2021, the company had issued 40,000 executive stock options permitting executives to buy 40,000 shares of stock for $25. The vesting schedule is 20% the first year, 30% the second year, and 50% the third year (graded-vesting). The fair value of the options is estimated as follows: Vesting Date Amount Vesting Fair Value per Option Dec. 31, 2021 20 % 2$ Dec. 31, 2022 30 % 2$ 8 Dec. 31, 2023 50 % $ 12 What is the compensation expense related to the options to be recorded in 2021? O $48,000. $96,000. O $128,000. O $184,000.
On March 1, 2022, Hudson Corp. purchased a put option on shares of ICA stock. The contract was for 100 shares at a strike price of $130 per share, with an expiration date of May 31, 2022. The option contract premium (the amount paid to enter the contract at signing) was $40. On March 31, a market appraisal estimated the time value of the option to be $30. Hudson settled the option contract on May 10. Prices of ICA stock during the option period are provided below. Price of ICA stocks March 1 $130 March 31 $120 May 10 $125 At what amount would Hudson report as the value of the put option in its March 31, 2022 balance sheet? Put Option account balance as of March 31, 2022 4,000
Fortune Brands granted options on January 1, 2024, that allows the recipient to purchase 15.0 million of the company's $1 par common shares within the next eight years, but not before December 31, 2026 (the vesting date). The exercise price is the market price of the shares on the date of grant, $17 per share. The fair value of the options, estimated by an appropriate option pricing model, is $4 per option. No forfeitures are anticipated. Ignoring taxes, what is the effect on earnings in the year after the options are granted to executives? Note: Round your answer to 1 decimal place. Multiple Choice O $60.0 million $90.0 million $0 $20.0 million
The board of directors of an entity approved a share option plan for key executives. On January 1, 2021, 200,000 share options were granted exercisable for 200,000 ordinary shares of P10 par value. The options are exercisable between January 1, 2024 and December 31, 2026 at 80% of the quoted market price on January 1, 2021 which was P15. The fair value of the 200,000 options is P6 per option. Twenty thousand options were forfeited when an executive resigned in 2020. All other options were exercised on July 1, 2025 when the share price jumped unexpectedly to P19.What is the compensation expense for 2022?
Under its executive stock option plan, National Corporation granted 12 million options on January 1, 2018, that permit executives to purchase 12 million of the company's $1 par common shares within the next six years, but not before December 31, 2020 (the vesting date). The exercise price is the market price of the shares on the date of grant, $17 per share. The fair value of the options, estimated by an appropriate option pricing model, is $5 per option. Suppose that the options are exercised on April 3, 2021, when the market price is $19 per share. Ignoring taxes, what journal entry will National record? (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in millions (i.e., 10,000,000 should be entered as 10).) View transaction list Journal entry worksheet 1 Record entry for options exercised on April 3, 2021, when the market price is $19 per share. Note: Enter debits before credits. Date April 03, 2021…
Newmont Corp grants stock options to its top executives. On January 1, 2021, 24 million options were granted, each giving the executive owning them the right to acquire five $1 par common shares. The exercise price is the market price on the grant date – $30 per share ($120 per option). Options vest on January 1, 2025. They cannot be exercised before that date and will expire on December 31, 2027. The fair value of the 24 million options, estimated by an appropriate option pricing model, is $42 per option. Ignore income tax. Newmont's compensation expense in 2021 for these stock options was: (Round your answer to nearest whole dollar amount.) rev: 04_13_2020_QC_CS-207906 Multiple Choice $504 million. $1,008 million. $252 million. $0.
Options were granted on January 1, 2023by Paltel Co. to purchase 15,000 common shares at an exercise price of $22. The average market price of Paltel's common stock during 2023 was $30 per share. Calculate the incremental shares (denominator) for these options on December 31, 2023.