On 1 July 2023 Cooloola Ltd provided 1 million options to its chief executive officer. The options were valued at $1.00 each and allowed the chief executive officer to acquire shares in Cooloola Ltd for $7 each. The chief executive officer is not permitted to exercise the options before 30 June 2025 but may then exercise them at any time between 1 July 2025 and 30 June 2026. The market price of the Cooloola Ltd shares on 1 July 2023 was $6.50. On 31 December 2025 the share price reaches $7.70, and the chief executive officer decides to exercise her options and acquire the shares in Cooloola Ltd. Required: Account for the issue and exercise of the options in Cooloola Ltd.
On 1 July 2023 Cooloola Ltd provided 1 million options to its chief executive officer. The options were valued at $1.00 each and allowed the chief executive officer to acquire shares in Cooloola Ltd for $7 each. The chief executive officer is not permitted to exercise the options before 30 June 2025 but may then exercise them at any time between 1 July 2025 and 30 June 2026. The market price of the Cooloola Ltd shares on 1 July 2023 was $6.50. On 31 December 2025 the share price reaches $7.70, and the chief executive officer decides to exercise her options and acquire the shares in Cooloola Ltd. Required: Account for the issue and exercise of the options in Cooloola Ltd.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
24. On 1 July 2023 Cooloola Ltd provided 1 million options to its chief executive officer. The options were valued at $1.00 each and allowed the chief executive officer to acquire shares in Cooloola Ltd for $7 each. The chief executive officer is not permitted to exercise the options before 30 June 2025 but may then exercise them at any time between 1 July 2025 and 30 June 2026. The market price of the Cooloola Ltd shares on 1 July 2023 was $6.50.
On 31 December 2025 the share price reaches $7.70, and the chief executive officer decides to exercise her options and acquire the shares in Cooloola Ltd.
Required:
Account for the issue and exercise of the options in Cooloola Ltd.
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 3 steps
Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education