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, 2021, Hugh Morris Comedy Club (HMCC) granted 1.2 million stock options to key executives exercisable for 1.2 million shares of the company’s common stock at $20 per share. The stock options are intended as compensation for the next three years. The options are exercisable within a four-year period beginning January 1, 2024, by the executives still in the employ of the company. No options were terminated during 2021. The market price of the common stock was $23 per share at the date of the grant. HMCC estimated the fair value of the options at $12 each. 1% of the options are forfeited during 2022 due to executive turnover. What amount should HMCC record as compensation expense for the year ended December 31, 2022, assuming HMCC chooses the option to record forfeitures as they actually occur? (Enter your answer in whole dollars.)On January 1, 2020, ABC Company granted to employees a share-based payment with cash and share alternative. The provisions include the right to a cash payment equal to the value of 10,000 phantom shares or 15,000 ordinary shares with a par value of P40. The grant is conditional upon the completion of three years’ service. If the employees choose the share alternative, the shares must be held for three years after the vesting date.At grant date, the share price is P60. At the end of 2020, 2021 and 2022 the share prices are P63, P66 and P72, respectively.After taking into account the effect of vesting restrictions, the entity estimated that the fair value of the share alternative on grant date is P45. On January 1, 2023, the employees selected the share alternative.What amount of share premium should be recorded from the issuance of shares on January 1, 2023?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. Hufflepuff initially estimates that it is probable that the goal will be achieved. How much compensation will be recorded in 2020, 2021, and 2022, the vesting period?
- 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 November 1, 2020, Sarasota Company adopted a stock-option plan that granted options to key executives to purchase 37,500 shares of the company’s $10 par value common stock. The options were granted on January 2, 2021, and were exercisable 2 years after the date of grant if the grantee was still an employee of the company. The options expired 6 years from date of grant. The option price was set at $40, and the fair value option-pricing model determines the total compensation expense to be $562,500.All of the options were exercised during the year 2023: 25,000 on January 3 when the market price was $66, and 12,500 on May 1 when the market price was $75 a share.Prepare journal entries relating to the stock option plan for the years 2021, 2022, and 2023. Assume that the employee performs services equally in 2022 and 2023. (On November 1, 2020, Sandhill Company adopted a stock option plan that granted options to key executives to purchase 30,000 shares of the company's $10 par value common stock. The options were granted on January 2, 2021, and were exercisable 2 years after the date of grant if the grantee was still an employee of the company. The options expired 6 years from date of grant. The option price was set at $30, and the fair value option-pricing model determines the total compersation expense to be $450,000. All of the options were exercised during the year 2023: 20,000 on January 3 when the market price was $69, and 10,000 on May 1 when the market price was $78 a share. Prepare journal entries relating to the stock option plan for the years 2021, 2022, and 2023. Assume that the employee performs services equally in 2022 and 2023. (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…
- On January 1, 2020, ABC Company granted the president compensatory share options to buy 10,000 shares of P100 par value. The options call for a price of P140 per share and are exercisable for four years following the grant date. The president exercised the options on December 31, 2020. The market price of the share was P150 on January 1, 2020 and P180 on December 31, 2020. The fair value of a similar share option with the same terms was P50 on the grant date.What is the compensation expense for 2020?On January 1, 2020 share options were granted to employees where they can purchase 100,000 ordinary shares of P80 par value at P100 per share. The fair value of the share options on this date was P25 per share. The officers are entitled to the share options only after completing two years of service. The options can be exercised starting January 1, 2022 and shall expire on December 31, 2022. The amount of compensation expense to be reported in 2020 is a. P0 b. P1,250,000 c. P2,500,000 d. P8,000,000 Norie Company leased an asset on a finance lease. The present value of the lease payments total P686,000 and the fair value of the asset is P750,000. The asset has a useful life of 5 years and the lease term is 4 years. The bargain purchase option for the asset at the end of its useful life is nominal and is substantially lower than the value of the asset at that date. Depreciation for the asset is computed using straight line method. How much is the annual…In order to retain certain key executives, Wildhorse Corporation granted them incentive stock options on December 31, 2024. A total of 152000 options were granted at an option price of $35 per share. Market prices of the stock were as follows: December 31, 2025 December 31, 2026 The options were granted as compensation for executives' services to be rendered over a two-year period beginning January 1, 2025. The Black-Scholes option-pricing model determined total compensation expense to be $1501000. $44 per share 49 per share What amount of compensation expense should Wildhorse recognize as a result of this plan for the year ended December 31, 2025 under the fair value method? O $750500 $1653000 $1501000 $2622950
- Current Attempt in Progress On January 1, 2021, Crane Company granted Sam Wine, an employee, an option to buy 1,000 shares of Crane 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 $5100. Wine exercised his option on October 1, 2021 and sold his 1,000 shares on December 1, 2021. Quoted market prices of Crane Co. stock in 2021 were: July 1 October 1 December 1 $28 per share $34 per share $38 per share The service period is for three years beginning January 1, 2021. As a result of the option granted to Wine, using the fair value method, Crane should recognize compensation expense for 2021 on its books in the amount of $0. O $1700. $5100. O $1275.On November 1, 2019, Sheridan Corp. adopted a stock option plan that granted options to key executives to purchase 42,300 common shares. The options were granted on January 2, 2020, and were exercisable two years after the date of grant if the grantee was still a company employee; the options expire six years from the date of grant. The option price was set at $39, and total compensation expense was estimated to be $541,000. Note that the calculation did not take forfeitures into account. On April 1, 2021, 3,300 options were terminated when some employees resigned from the company. The fair value of the shares at that date was $26. All of the remaining options were exercised during the year 2022: 29,600 on January 3 when the fair value was $49, and 9,400 on May 1 when the fair value was $55 a share. Assume that the entity follows ASPE and has chosen not to reflect forfeitures in its upfront estimate of compensation expense. (a) Prepare journal entries relating to the stock option plan…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?