Answered: On Jan. 1, 2020, Hufflepuff Industries,…

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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On Jan. 1, 2020, Hufflepuff Industries, Inc. issues stock options for 100,000 shares to a regional manager. The options have an estimated fair value of $6 each. The provide additional incentive for the manager's achievement, the options are not exercisable unless the region revenue increase by 8% in three years. Because the manager when to Ravenclaw College, Hufflepuff initially estimates that the incompetent manager will not achieve the goal. How much compensation will be recorded each year in 2020, 2021, and 2022, the vesting period?

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