+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 January 1, 2020, Urban Inc. issued 10,000 shares of $1 par common stock for $10 per share. On June 30, 2020, Urban Inc. reacquired 1,000 shares of common stock at $8 per share. On December 15, 2020, Urban Inc. reissued 500 shares of common stock at $12 per share. Assume that Urban accounts for repurchases of its common stock as direct stock retirements. The entry on June 30, 2020, to account for the direct stock retirement would include a Credit to Paid-in Capital in Excess of Par-Common Stock for $2,000. Credit to Retained Earnings for $2,000. Debit to Paid-in Capital in Excess of Par-Common Stock for $9,000. Debit to Retained Earnings for $9,000.
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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?
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