vrited On January 1, 2021, King's X Corp. granted stock options to officers and key employees for the purchase of 45,000 shares of the company's $10 par common stock at $27 per share. The options were exercisable within a 4-year period beginning January 1, 2026 by grantees still in the employ of the company, and had an expiration date of December 31, 2029. The vesting (service) period for this award was 5 years. Assume that a valid option pricing model determined the fair value of each option at the grant date to be $18. The fair market value of King's X stock on the grant date was $30 per share. On April 20, 2026, 32,000 options were exercised when the market price of the common stock was $42.50 per share. The remaining 13,000 options were never exercised.

vrited On January 1, 2021, King's X Corp. granted stock options to officers and key employees for the purchase of 45,000 shares of the company's $10 par common stock at $27 per share. The options were exercisable within a 4-year period beginning January 1, 2026 by grantees still in the employ of the company, and had an expiration date of December 31, 2029. The vesting (service) period for this award was 5 years. Assume that a valid option pricing model determined the fair value of each option at the grant date to be $18. The fair market value of King's X stock on the grant date was $30 per share. On April 20, 2026, 32,000 options were exercised when the market price of the common stock was $42.50 per share. The remaining 13,000 options were never exercised.

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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Please Introduction and explanation also prepare journal entry then no plagiarism please i humble request
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On November 1, 2020, Sweet Company adopted a stock-option plan that granted options to key executives to purchase 31,800 shares of the company’s $9 par value common stock. The options were granted on January 2, 2021, 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 $477,000.All of the options were exercised during the year 2023: 21,200 on January 3 when the market price was $68, and 10,600 on May 1 when the market price was $78 a share.Prepare journal entries relating to the stock option plan for the years 2021, 2022, and 2023. Assume that the employee performs services equally in 2022 and 2023. (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…
(Issuance, Exercise, and Termination of Stock Options) On January 1, 2018, Titania Inc. granted stock options to officers and key employees for the purchase of 20,000 shares of the company’s $10 par common stock at $25 per share. The options were exercisable within a 5-year period beginning January 1, 2020, by grantees still in the employ of the company, and expiring December 31, 2024. The service period for this award is 2 years. Assume that the fair value option-pricing model determines total compensation expense to be $350,000.On April 1, 2019, 2,000 options were terminated when the employees resigned from the company. The market price of the common stock was $35 per share on this date.On March 31, 2020, 12,000 options were exercised when the market price of the common stock was $40 per share.InstructionsPrepare journal entries to record issuance of the stock options, termination of the stock options, exercise of the stock options, and charges to compensation expense, for the years…
On January 1, 2020, XYZ Co. granted options to key executives to purchase 100,000 shares of the company's $10 par value Common Stock at an option price of $50 per share. The Black-Scholes option pricing model determines total compensation expense to be $750,000. The options become exercisable after a 2 year service period from the date of grant. Assume all options were exercised in 2022 on the following dates: April 16, 2022– 70,000 options were exercised when the market value per share was $63 September 4, 2022 – 30,000 options were exercised when the market value per share was $72 Prepare a journal entry for: a) January 1, 2020 b) December 31, 2020 c) December 31, 2021 d) April 16th, 2022 e) September 4, 2022
On January 1, 2021, Monty Inc. granted stock options to officers and key employees for the purchase of 24,000 shares of the company’s $10 par common stock at $25 per share. The options were exercisable within a 5-year period beginning January 1, 2023, by grantees still in the employ of the company, and expiring December 31, 2027. The service period for this award is 2 years. Assume that the fair value option-pricing model determines total compensation expense to be $364,000.On April 1, 2022, 2,400 options were terminated when the employees resigned from the company. The market price of the common stock was $34 per share on this date.On March 31, 2023, 14,400 options were exercised when the market price of the common stock was $41 per share.Prepare journal entries to record issuance of the stock options, termination of the stock options, exercise of the stock options, and charges to compensation expense, for the years ended December 31, 2021, 2022, and 2023
On January 1, 2021, Tamarisk Inc. granted stock options to officers and key employees for the purchase of 21,000 shares of the company’s $ 10 par common stock at $ 24 per share. The options were exercisable within a 5-year period beginning January 1, 2023, by grantees still in the employ of the company, and expiring December 31, 2027. The service period for this award is 2 years. Assume that the fair value option-pricing model determines total compensation expense to be $ 343,000.On April 1, 2022, 2,100 options were terminated when the employees resigned from the company. The market price of the common stock was $ 36 per share on this date.On March 31, 2023, 12,600 options were exercised when the market price of the common stock was $ 42 per share.Prepare journal entries to record issuance of the stock options, termination of the stock options, exercise of the stock options, and charges to compensation expense, for the years ended December 31, 2021, 2022, and 2023. (Credit account…
On January 1, 2020, Ruby Red Company granted to each of its four executives the right to choose either 1,000 ordinary shares or to receive cash payment equal to 900 shares. The grant is conditional upon the complecion of three years of service. The entity estimates that the value of the share alternative on January 1,2020 is P 150 per share. Ruby Red's ordinary share capital has a par value P 100. The following table shows the fair value of Ruby Red's ordinary share: January 1,2020 P P 158 December 31, 2020 160 December 31, 2021 165 December 31, 2022 168 December 31, 2023 172 One executive exercise his right to receive the cash alternative on December 31, 2022; the others chose to receive the ordinary shares on December 31, 2023. REQUIRED: a.) Determine the amount assigned to equity on January 1,2020. b.) Compute the amount charged to Compensation Expense during the years 2020, 2021,2022 and 2023 as a result of the foregoing. c.) Prepare all the entries relating to the above during the…
Items 23 to 26 are based on the Following Information: On January 1, 2019, an entity granted 100 share options each to 500 employees, conditional upon the employee's remaining in the entity's employ during the vesting period. The share options vest at the end of a three-year period. On grant date, each share option has a fair value of P30. The par value per share is P100 and the option price is P120. On December 31, 2020, 30 employees have left and it is expected that on the basis of a weighted average probability, a further 30 employees will leave before the end of the three-year period. On December 31, 2021, only 20 employees actually left and all of the share options are exercised on such date. 23. What is the compensation expense for 2019? a. 500,000 b. 250,000 c. 750,000 d. 450,000 24. What is the compensation expense for 2020? a. 880,000 b. 380,000 c. 440,000 d. 500,000 25. What is the compensation expense for 2021? a. 600,000 b. 880,000 c. 380,000 d. 470,000
On January 1, 2021, Sweet Inc. granted stock options to officers and key employees for the purchase of 22,000 shares of the company's $10 par common stock at $25 per share. The options were exercisable within a 5-year period beginning January 1, 2023, by grantees still in the employ of the company, and expiring December 31, 2027. The service period for this award is 2 years. Assume that the fair value option-pricing model determines total compensation expense to be $366,800. On April 1, 2022, 2.200 options were terminated when the employees resigned from the company. The market price of the common stock was $34 per share on this date. On March 31, 2023, 13,200 options were exercised when the market price of the common stock was $41 per share. Prepare journal entries to record issuance of the stock options, termination of the stock options, exercise of the stock options, and charges to compensation expense, for the years ended December 31, 2021, 2022, and 2023. (Credit account titles…
On January 1, 2024, Wendy Day Company granted stock options to key executives exercisable for 500,000 shares of the company's common stock at $18 per share. The stock options are intended as compensation for the next four years. The options are exercisable within a four-year period beginning January 1, 2028, by the executives still in the employ of the company. No options were terminated during 2024, but the company anticipates 5% forfeitures over the life of the stock options. The market price of the common stock was $18 per share at the date of the grant. Wendy Day estimated the fair value of the options at $4 each. 1% of the options are forfeited during 2025 due to executive turnover. What amount should Wendy Day record as compensation expense for the year ended December 31, 2025, assuming the company chooses to estimate forfeitures? Multiple Choice $475,000 $495,000 $500,000 $520,000
19.On January 1, 2021, Teledyne Technologies granted stock options to key employees for the purchase of 85,000 shares of the company's common stock at $29 per share. The options are intended to compensate employees for the next two years. The options are exercisable within a four-year period beginning January 1, 2023, by the grantees still in the employ of the company. No options were terminated during 2021, but the company does have an experience of 4% forfeitures over the life of the stock options. The market price of the common stock was $35 per share at the date of the grant. Teledyne used the Binomial pricing model and estimated the fair value of each of the options at $11. What amount should Teledyne charge to compensation expense for the year ended December 31, 2021? Multiple Choice $897,600. $467,500. $935,000. $448,800.