SMR Corp. granted 226,000 stock options to employees on 12/31/2019 as compensation over the next 3 years. The options had a strike price of $74 per share and market prices of $89 on 12/31/2020 and $85 on 12/31/2021. If they originally estimated the original fair value to be $2,260,000, how much compensation expense should they recognize on 12/31/2021, assuming that the options can only be used to purchase stock? (NIE 14) $904,000 O $2,486,000 O $753,333 O $3,390,000

SMR Corp. granted 226,000 stock options to employees on 12/31/2019 as compensation over the next 3 years. The options had a strike price of $74 per share and market prices of $89 on 12/31/2020 and $85 on 12/31/2021. If they originally estimated the original fair value to be $2,260,000, how much compensation expense should they recognize on 12/31/2021, assuming that the options can only be used to purchase stock? (NIE 14) $904,000 O $2,486,000 O $753,333 O $3,390,000

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Concept explainers

Employee Benefits

In an organization employees are the most important resource and most important asset. They can lead an organization to the sky or can be the reason for unsuccessful of business. Therefore, it is very much important that employees of an organization should be satisfied by the environment of the organization and most importantly with the salary, wages incentives, etc.

Question

SMR Corp. granted 226,000 stock options to employees on 12/31/2019 as
compensation over the next 3 years. The options had a strike price of $74 per share and market
prices of $89 on 12/31/2020 and $85 on 12/31/2021. If they originally estimated the original fair
value to be $2,260,000, how much compensation expense should they recognize on 12/31/2021,
assuming that the options can only be used to purchase stock? (NIE 14)
$904,000
$2,486,000
O $753,333
০ $3,390,000

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