Trafford Company is a calendar-year U.S. firm with operations in several countries. At January 1, 2024, the company had issued 72,000 executive stock options permitting executives to buy 72.000 shares of stock for $25. The vesting schedule is 20% the first year, 30% the second year, and 50% the third year (graded-vesting). Trafford does not choose to account for the options on a straight-line basis. The fair value of the options is estimated as follows: Vesting Date December 31, 2024 December 31, 2025 December 31, 2026 Multiple Choice $100.000 What is the compensation expense related to the options to be recorded in 2025? $273.600 $216.000 Amount Vesting 20% 30% 50% $288.000 Fair Value per Option $5 $ 10 $ 15
Trafford Company is a calendar-year U.S. firm with operations in several countries. At January 1, 2024, the company had issued 72,000 executive stock options permitting executives to buy 72.000 shares of stock for $25. The vesting schedule is 20% the first year, 30% the second year, and 50% the third year (graded-vesting). Trafford does not choose to account for the options on a straight-line basis. The fair value of the options is estimated as follows: Vesting Date December 31, 2024 December 31, 2025 December 31, 2026 Multiple Choice $100.000 What is the compensation expense related to the options to be recorded in 2025? $273.600 $216.000 Amount Vesting 20% 30% 50% $288.000 Fair Value per Option $5 $ 10 $ 15
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
M¹
Transcribed Image Text:Trafford Company is a calendar-year U.S. firm with operations in several countries. At January 1, 2024, the company had issued
72,000 executive stock options permitting executives to buy 72,000 shares of stock for $25. The vesting schedule is 20% the first
year, 30% the second year, and 50% the third year (graded-vesting). Trafford does not choose to account for the options on a
straight-line basis. The fair value of the options is estimated as follows:
Fair Value
Vesting Date
per Option
December 31, 2024
20%
$5
December 31, 2025
30%
$ 10
December 31, 2026
50%
$ 15
What is the compensation expense related to the options to be recorded in 2025?
Multiple Choice
$100,000
$273.600
$216.000
Amount
Vesting
$288.000
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education