+OK/s E O O ..5:30 PMNE 96)EAdd(Stock - Option Plan) Berg company adopteda stock -option plan on November 30, 2011,that provided that 70,000 shares of $5 parvalue be designated as a available for thegranting of options to officers of thecorporation at a price of $9 a share. Themarket price was $12 a share on November30,2012.On January 2,2012, options to purchase28,000 shares were granted to presidentTom Winter - 15,000 for service rendered in2012 and 13,000 for services to be renderedin 2013. Also on that date ,options topurchase 14,000 shares were granted tovice president Michelle Bennett - 7,000 forservice to be rendered in 2012 and 7,000 forservices to be rendered in 2013. The marketprice of the stock was $14 a share onJanuary 2,2012. the options wereexercisable for a period of one yearfollowing the year in which the service wererendered. The fair value of the options onthe grant date was $4 per option.In 2013, neither the president nor the vicepresident exercised their options becausethe market price or the stock was below theexercise price. The market price of the stockwas $8 a share on December 31,2013 whenthe options for 2012 services lapsed. OnDecember 31,2014, both president Winterand vice president Bennett exercised theiroptions for 13,000 and 7,000 shares„respectively, when the market price was$16 a share.Prepare the necessary journal entries in2011 when the stock -option plan wasadopted , in 2012 when options weregranted , in 2013 when options lapsed, andin 2014 when options were exercised.

Journal: It refers to an account in which all the financial transactions pertaining to a business…

(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.

(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.

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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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.…
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On 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.…