On January 1, 2024, Farmer Fabrication issued stock options for 260,000 shares to a division manager. The options have an estimated fair value of $7 each. To provide additional incentive for managerial achievement, the options are not exercisable unless Farmer Fabrication's stock price increases by 5% in three years. Farmer initially estimates that it is not probable the goal will be achieved. How much compensation will be recorded in 2024, 2025, and 2026? Compensation each year

FINANCIAL ACCOUNTING
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Chapter1: Financial Statements And Business Decisions
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On January 1, 2024, Farmer Fabrication issued stock options for 260,000 shares to a division manager. The options have an estimated
fair value of $7 each. To provide additional incentive for managerial achievement, the options are not exercisable unless Farmer
Fabrication's stock price increases by 5% in three years. Farmer initially estimates that it is not probable the goal will be achieved.
How much compensation will be recorded in 2024, 2025, and 2026?
Compensation
each year
Transcribed Image Text:On January 1, 2024, Farmer Fabrication issued stock options for 260,000 shares to a division manager. The options have an estimated fair value of $7 each. To provide additional incentive for managerial achievement, the options are not exercisable unless Farmer Fabrication's stock price increases by 5% in three years. Farmer initially estimates that it is not probable the goal will be achieved. How much compensation will be recorded in 2024, 2025, and 2026? Compensation each year
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