On January 1, 2020 Sams Company granted Jim Norman, an employee, an option to buy 300 shares of Sams stock for $40 per share. The option is exercisable for 5 years from date of grant. Using a fair value option pricing model, total compensation expense is determined to be $4,800. The market value for each share of stock is $55 a share. The service period for the stock compensation is for two years beginning January 1, 2020. Record the journal entries for 2020 and 2021.
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- On January 1, 2019, Phoenix Corporation adopts a performance-based share option plan for 25 executives, with the number of shares based on the yearly increase in sales. At the end of 2019, based on a 10% increase in sales, it expects that each executive will be granted 150 options and that the fair value of an option expected to vest is 15.75. Phoenix expects a turnover rate of 15% over the 3-year service period. Determine the compensation expense for 2019 for this plan.On January 1, 2020, XYZ Co. granted options to key executives to purchase 100,000 shares of the company's $10 par value Common Stock at an option price of $50 per share. The Black-Scholes option pricing model determines total compensation expense to be $750,000. The options become exercisable after a 2 year service period from the date of grant. Assume all options were exercised in 2022 on the following dates: April 16, 2022– 70,000 options were exercised when the market value per share was $63 September 4, 2022 – 30,000 options were exercised when the market value per share was $72 Prepare a journal entry for: a) January 1, 2020 b) December 31, 2020 c) December 31, 2021 d) April 16th, 2022 e) September 4, 2022On January 1, 2021, Major Corp. granted its employees an option to purchase 5,000 of Major's common shares at $50 per share. The Black-Scholes option pricing model determined total compensation expense to be $225,000. The option is exercisable on December 31, 2022, after employees complete two years of service. The market price of Major's shares on December 31, 2021 was $52. For December 31, 2021, Major should recognize compensation expense of: Question 10 options: $10,000 $112,500 $250,000 $225,000 On December 1, 2021, Parfait Ltd. borrowed $180,000 from a local bank by signing a four-month, 5% interest bearing note. All payments will be made at the note's maturity date. Assuming Parfait has a December 31 year-end, the adjusting journal entry on December 31 will include a: Question 1 options: debit to Interest payable of $750. credit to Notes Payable of $750…
- On January 1, 2025, Ivanhoe Company granted stock options to officers and key employees for the purchase of 19400 shares of the company's $1 par value common stock at $20 per share as additional compensation for services to be rendered over the next three years. The options are exercisable during a five year period beginning January 1, 2028 by grantees still employed by Ivanhoe. The Black-Scholes option-pricing model determined total compensation expense to be $188700. The market price of common stock was $26 per share at the date of grant. The journal entry to record the compensation expense related to these options for 2025 would include a credit to the Paid-in Capital- Stock Options account for $62900. O $37740. O $38800. O $0.On January 1, 2021, Crane Company granted stock options to officers and key employees for the purchase of 18000 shares of the company's $1 par common stock at $18 per share as additional compensation for services to be rendered over the next three years. The options are exercisable during a five-year period beginning January 1,2024 by grantees still employed by Crane. The Black-Scholes option pricing model determines total compensation expense to be $180300. The market price of common stock was $24 per share at the date of grant. The journal entry to record the compensation expense related to these options for 2021 would include a credit to the Paid-in Capital-Stock Options account for O $0. O $36060. O $60100. O $32400.On June 1, 2020, ABC Company granted share options to key employees for the purchase of 42,000 of company’s ordinary share capital at P25 per share. Based on an Black-Scholes option pricing model used by the company, the fair value of each share option on this date was P10. The options are intended to compensate employees for the next two years. The options are exercisable within a four-year period beginning July 1, 2022 by grantees still in the employ of the company. The market price of Tool’s ordinary shares was P40 per share at the date of grant. No share options were terminated during the year. How much should ABC’s share to compensation expense for the year ended December 31, 2020?
- On January 1, 2021, Trent Company granted Dick Williams, an employee, an option to buy 400 shares of Trent Co. stock for $30 per share, the option exercisable for 5 years from date of grant. Using a fair value option pricing model, total compensation expense is determined to be $5,400. Williams exercised his option on September 1, 2021, and sold his 400 shares on December 1, 2021. Quoted market prices of Trent Co. stock during 2021 were: January 1 $30 per share September 1 $36 per share December 1 $40 per share The service period is for two years beginning January 1, 2021. As a result of the option granted to Williams, using the fair value method, Trent should recognize compensation expense for 2021 on its books in the amount of a. $5,400. b. $6,000. c. $2,700. d. $0.On January 1, 2019, Pepin Company adopts a compensatory share option plan for its 50 executives. The plan allows each executive to purchase 200 shares of its $2 par common stock for $30 per share after completing a 3-year service period. Pepin estimates the value of each option to be $14 on the grant date, and the company expects that 15% of the options will be forfeited and uses this rate in its compensation cost calculations in 2019. At the end of 2021, Pepin determined that the actual turnover was 7 executives for the entire service period. On January 6, 2022, 8 executives exercise their options. Required: 1. Prepare a schedule of Pepin’s compensation computations for its compensatory share option plan for 2019 through 2021. 2. Prepare Pepin’s journal entries for 2019 through 2022 in regard to this plan.On July 1, 2020, Paulina, Inc. granted share options to executives, which options allow them to purchase 20,000 ordinary shares at 25 per share. The options will vest provided that the executives will be employed in the company for the next two years. The options can be exercised for a one-year period starting July 1, 2022. By end of 2020, the market price of Paulina’s ordinary share as P33 per share. The fair value of the options cannot be reliably determined. All executives are expected to remain in the company for the whole vesting period. How much should Paulina charge to compensation expense for the year ended December 31, 2020? a. P0 b. P40,000 c. P80,000 d. P160,000
- On January 1, 2019, a company granted 100,000 options to key executives. Each option allows the executive to purchase one share of the company’s $16 par value common stock at a price of $42 per share. The options were exercisable within a 2-year period beginning January 1, 2022. On the grant date, a fair value option-pricing model determines total compensation to be $300,000. On January 1, 2022, 6,000 options were exercised. In the journal entry to record the exercise, how much should be recorded for Paid-in Capital in Excess of Par – common stock?On January 1, 2020, ABC Company granted share options to each of the 300 employees working in the Accounting department. The options price is P90 and the par value is P70 per share.The share options vest at the end of a three-year period provided that the employees remain in the entity’s employ and provided the volume of sales will increase by 10% per year.The fair value of each share option on grant date is P35.The share will vest as follows: If the sales increase by 10%, each employee will receive 200 share options; If the sales increase by 15%, each employee will receive 300 share options.· On December 31, 2020, the sales increased by 10%, and no employees have left the entity· On December 31, 2021, sales increased by 15% and no employees have left.On December 31, 2022, the sales increased by 15% and 50 employees left the entityWhat is the share premium upon exercise of the share options on December 31, 2022?On January 1, 2020, ABC Company granted share options to each of the 300 employees working in the Accounting department. The options price is P90 and the par value is P70 per share.The share options vest at the end of a three-year period provided that the employees remain in the entity’s employ and provided the volume of sales will increase by 10% per year. The fair value of each share option on grant date is P35. The share will vest as follows: If the sales increase by 10%, each employee will receive 200 share options; If the sales increase by 15%, each employee will receive 300 share options. · On December 31, 2020, the sales increased by 10%, and no employees have left the entity· On December 31, 2021, sales increased by 15% and no employees have left.On December 31, 2022, the sales increased by 15% and 50 employees left the entityWhat is the compensation expense for 2022?