Identifying and Analyzing Financial Statement Effects of Stock-Based CompensationThe stockholders' equity of Aspen Corporation at December 31, 2019, follows.7% Preferred stock, $100 par value, 20,000 shares authorized;3,200 shares issued and outstandingCommon stock, $15 par value, 300,000 shares authorized;24,000 shares issued and outstandingPaid-in capital in excess of par value-preferred stockPaid-in capital in excess of par value-common stockRetained earningsTotal stockholders' equityThe following transactions, among others, occurred during the following year.Employees exercised 9,600 stock options that were granted in 2015 and had a three-year vesting period. These options had an estimated fair value of $2 at the grant date, and an exercise price of $16. There were no other vested or unvested options after this exercise.• Awarded 800 shares of stock to new executives, when the stock price was $36.• Sold 8,000 shares to employees under the company-wide stock purchase plan. Under the plan, employees purchased the shares at a 10% discount when the stock price was $33 per share.• Granted 32,000 new stock options, with a strike price of $34 and an estimated fair value of $6. The options vest over three years.Start of yearStock options exercisedStock awardRequiredPrepare the December 31, 2019, statement of stockholders' equity assuming that the company reports 2019 pretax income of $386,400 before the effects of stock-based compensation. Assume the company has a 35% tax rate.Employee stock purchaseStock options grantedNet incomeEnd of year$$SharesIssued3,2000✓0 ✓0✓0✔0✔Preferred Stock$3,200 $360,00028,800288,000260,000$1,256,800$320,000ASPEN CORPORATIONStatement of Stockholders' Equitypar $100320,000$0 ✓0✔0✔0✔0✔320,000 ✓ $Paid-inCapital inExcess28,800$0✔0✓0 ✓0✔0✔28,800✔ $Common StockSharesIssued24,000 $9,600 ✓800 ✓8,000 ✓0 ✓0 ✓42,400 $Par $15360,000144,000 ✓12,000 ✓120,000 ✓0✔0✔636,000 ✓ $$Paid-inCapital inExcessRetained Earnings288,000 $9,600 ✓16,800✔144,000 ✓64,000 ✓0✔522,400✓✔ $260,0000✔0✔0✔0✔251,160 *511,160 x

Name: Identifying and Analyzing Financial Statement Effects of Stock-Based
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Description: Identifying and Analyzing Financial Statement Effects of Stock-Based CompensationThe stockholders' equity of Aspen Corporation at December 31, 2019, follows.7% Preferred stock, $100 par value, 20,000 shares authorized;3,200 shares issued and outstan

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Required Prepare the December 31, 2019, statement of stockholders' equity assuming that the company reports 2019 pretax income of $386,400 before the effects of stock-based compensation. Assume the company has a 35% tax rate.

Required Prepare the December 31, 2019, statement of stockholders' equity assuming that the company reports 2019 pretax income of $386,400 before the effects of stock-based compensation. Assume the company has a 35% tax rate.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

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