+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

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Chapter1: Financial Statements And Business Decisions

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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

+OK/s E O O ..
5:30 PM
NE 96)
EAdd
(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.
On January 2,2012, options to purchase
28,000 shares were granted to president
Tom Winter - 15,000 for service rendered in
2012 and 13,000 for services to be rendered
in 2013. Also on that date ,options to
purchase 14,000 shares were granted to
vice president Michelle Bennett - 7,000 for
service to be rendered in 2012 and 7,000 for
services to be rendered in 2013. The market
price of the stock was $14 a share on
January 2,2012. the options were
exercisable for a period of one year
following the year in which the service were
rendered. The fair value of the options on
the grant date was $4 per option.
In 2013, neither the president nor the vice
president exercised their options because
the market price or the stock was below the
exercise price. The market price of the stock
was $8 a share on December 31,2013 when
the options for 2012 services lapsed. On
December 31,2014, both president Winter
and vice president Bennett exercised their
options for 13,000 and 7,000 shares
„respectively, when the market price was
$16 a share.
Prepare the necessary journal entries in
2011 when the stock -option plan was
adopted , in 2012 when options were
granted , in 2013 when options lapsed, and
in 2014 when options were exercised.

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