(Stock - Option Plan) Berg company adopted a stock -option plan on November 30, 2011, that provided that 70,000 shares of $5 par value be designated as a available for the granting of options to officers of the corporation at a price of $9 a share. The market price was $12 a share on November 30,2012.
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- June Inc. issued 9,000 nonqualified stock options valued at $27,000 (in total--$3 each). Each option entitles the holder to purchase one share of stock at $5 per share. The options vest over three years - one-third in 2016 (the year of issue), one-third in 2017, and one-third in 2018. Three thousand options are exercised in 2017 at a time when the stock price of the stock is $9. What is the 2017 book-tax difference associated with the stock options (assume ASC 718 applies to the options)? $3,000 favorable $1,500 unfavorable $6,000 favorable $4,500 favorable |On July 1, 2024, Bonita Company adopted a stock option plan that granted options to key executives to purchase 94,000 shares of the company's $1 par value common stock. The options were granted on January 1, 2025, and were exercisable 3 years after the date of grant if the grantee was still an employee of the company. The options expired 4 years from date of grant. The option price was set at $63, and the fair value option pricing model determines the total compensation expense to be $714,000. All of the options were exercised February 1, 2028, when the market price was $77 a share. Prepare journal entries relating to the stock option plan for the years 2024 through 2028. Assume that the employee performs services equally in 2025, 2026 and 2027. (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 and enter O for the amounts. List all debit entries before credit entries.…Assume that on January 1, year 1, ABC Incorporated issued 5,000 stock options with an estimated value of $10 per option. Each option entitles the owner to purchase one share of ABC stock for $25 a share (the per share price of ABC stock on January 1, year 1, when the options were granted). The options vest at the end of the day on December 31, year 2. All 5,000 stock options were exercised in year 3 when the ABC stock was valued at $31 per share. Identify ABC's year 1, 2, and 3 tax deductions and book-tax differences (indicate as favorable or unfavorable and as permanent or temporary) associated with the stock options under the following alternative scenarios: Required: a. The stock options are incentive stock options. b. The stock options are nonqualified stock options. Complete the following table. Note: For all requirements, leave no answer blank. Enter zero if applicable and select "Not Applicable" if no effect. Under ASC 718 a. Incentive Stock Options b. Nonqualified Stock Options…
- (Issuance, Exercise, and Termination of Stock Options) On January 1, 2016, Nichols Corporation granted 10,000 options to key executives. Each option allows the executive to purchase one share of Nichols’ $5 par value common stock at a price of $20 per share. The options were exercisable within a 2-year period beginning January 1, 2018, if the grantee is stillemployed by the company at the time of the exercise. On the grant date, Nichols’ stock was trading at $25 per share, and a fair value option-pricing model determines total compensation to be $400,000.On May 1, 2018, 8,000 options were exercised when the market price of Nichols’ stock was $30 per share. The remaining options lapsed in 2020 because executives decided not to exercise their options. InstructionsPrepare the necessary journal entries related to the stock option plan for the years 2016 through 2020.On November 1, 2017, Windsor Company adopted a stock-option plan that granted options to key executives to purchase 19,000 shares of the company’s $10 par value common stock. The options were granted on January 2, 2018, 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 $328,000. All of the options were exercised during the year 2020: 4,750 on January 3 when the market price was $67, and 14,250 on May 1 when the market price was $77 a share. Prepare journal entries relating to the stock option plan for the years 2018, 2019, and 2020. Assume that the employee performs services equally in 2018 and 2019. (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 and…Man of War Company adopted a stock-option plan on April 30, 2019, that provided that 500,000 shares of $10 par value stock be designated as available for the granting of options to officers of the corporation at a price of $26 a share. The market price was $20 a share on April 30, 2019.On January 2, 2020, options to purchase 40,000 shares were granted to president—15,000 for services to be rendered in 2020 and 25,000 for services to be rendered in 2021. Also on that date, options to purchase 26,000 shares were granted to chief financial officer—10,000 for services to be rendered in 2020 and 16,000 for services to be rendered in 2021. The market price of the stock was $23 a share on January 2, 2020. The options were exercisable for a period of one year following the year in which the services were rendered. The fair value of the options on the grant date was $3.20 per option. In 2021, neither the president nor the chief financial officer exercised their options because the market price…
- On November 1, 2017, Marigold Company adopted a stock-option plan that granted options to key executives to purchase 21,000shares of the company’s $10 par value common stock. The options were granted on January 2, 2018, 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 $39, and the fair value option-pricing model determines the total compensation expense to be $309,000. All of the options were exercised during the year 2020: 5,250 on January 3 when the market price was $66, and 15,750 on May 1 when the market price was $78 a share. Prepare journal entries relating to the stock option plan for the years 2018, 2019, and 2020. Assume that the employee performs services equally in 2018 and 2019. (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 and…The board of directors of an entity approved a share option plan for key executives. On January 1, 2021, 200,000 share options were granted exercisable for 200,000 ordinary shares of P10 par value. The options are exercisable between January 1, 2024 and December 31, 2026 at 80% of the quoted market price on January 1, 2021 which was P15. The fair value of the 200,000 options is P6 per option. Twenty thousand options were forfeited when an executive resigned in 2020. All other options were exercised on July 1, 2025 when the share price jumped unexpectedly to P19.What is the compensation expense for 2022?Newmont Corp grants stock options to its top executives. On January 1, 2021, 24 million options were granted, each giving the executive owning them the right to acquire five $1 par common shares. The exercise price is the market price on the grant date – $30 per share ($120 per option). Options vest on January 1, 2025. They cannot be exercised before that date and will expire on December 31, 2027. The fair value of the 24 million options, estimated by an appropriate option pricing model, is $42 per option. Ignore income tax. Newmont's compensation expense in 2021 for these stock options was: (Round your answer to nearest whole dollar amount.) rev: 04_13_2020_QC_CS-207906 Multiple Choice $504 million. $1,008 million. $252 million. $0.
- Can you help me with step by step explanation, please? Thank you :)Please help and show formulaOn July 1, 2024, Ayayai Company adopted a stock option plan that granted options to key executives to purchase 86,000 shares of the company's $1 par value common stock. The options were granted on January 1, 2025, and were exercisable 3 years after the date of grant if the grantee was still an employee of the company. The options expired 4 years from date of grant. The option price was set at $63, and the fair value option pricing model determines the total compensation expense to be $612,000. All of the options were exercised February 1, 2028, when the market price was $75 a share. Prepare journal entries relating to the stock bption plan for the years 2024 through 2028. Assume that the employee performs services equally in 2025, 2026 and 2027. (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 and enter O for the amounts. List all debit entries before credit entries.…