Required: d. At the end of 2023, Purple managers reach their goal of revenue increase. Write the journal entry required for 12/31/2023. e. Separate from the options above. Purple previously had granted and recognized stock options with a value of $200,000 that were exercised in 2023. The 40,000 stock options had a strike price of $20 and the market price of the common stock on the day of exercise was $28 per share. Record the journal entry to show the exercise of the options.
Required: d. At the end of 2023, Purple managers reach their goal of revenue increase. Write the journal entry required for 12/31/2023. e. Separate from the options above. Purple previously had granted and recognized stock options with a value of $200,000 that were exercised in 2023. The 40,000 stock options had a strike price of $20 and the market price of the common stock on the day of exercise was $28 per share. Record the journal entry to show the exercise of the options.
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter15: Contributed Capital
Section: Chapter Questions
Problem 7RE: On January 1, 2019, Phoenix Corporation adopts a performance-based share option plan for 25...
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Question
T5.
![On January 1, 2021, Purple Inc. issued stock options for 200,000 shares to division managers. The options have an
estimated fair value of $6 each and vest in 3 years subject to conditions. The options are not exercisable unless divisional
revenue increases by 6% 3 years. Purple initially estimates that it is probable the goal will be achieved.
Required:
d. At the end of 2023, Purple managers reach their goal of revenue increase. Write the journal entry required for
12/31/2023.
e. Separate from the options above. Purple previously had granted and recognized stock options with a value of
$200,000 that were exercised in 2023. The 40,000 stock options had a strike price of $20 and the market price of the
common stock on the day of exercise was $28 per share. Record the journal entry to show the exercise of the options.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F32962c33-d437-4e75-9a6c-9102db644571%2F5c36f110-050c-4a7d-80b0-bd2bcfe26341%2Ftzqg14_processed.jpeg&w=3840&q=75)
Transcribed Image Text:On January 1, 2021, Purple Inc. issued stock options for 200,000 shares to division managers. The options have an
estimated fair value of $6 each and vest in 3 years subject to conditions. The options are not exercisable unless divisional
revenue increases by 6% 3 years. Purple initially estimates that it is probable the goal will be achieved.
Required:
d. At the end of 2023, Purple managers reach their goal of revenue increase. Write the journal entry required for
12/31/2023.
e. Separate from the options above. Purple previously had granted and recognized stock options with a value of
$200,000 that were exercised in 2023. The 40,000 stock options had a strike price of $20 and the market price of the
common stock on the day of exercise was $28 per share. Record the journal entry to show the exercise of the options.
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