INTERM.ACCT.:REPORTING...-CENGAGENOWV2
3rd Edition
ISBN: 9781337909358
Author: WAHLEN
Publisher: CENGAGE L
expand_more
expand_more
format_list_bulleted
Concept explainers
Question
Chapter 15, Problem 7MC
To determine
Identify the amount charged by the Corporation S to compensation expense for the year ended December 31, 2019.
Expert Solution & Answer
Trending nowThis is a popular solution!
Students have asked these similar questions
On January 1, 2019, Stoner Corporation granted compensatory share options to key employees for the purchase of shares of the company's common stock at $25 per share. The options are intended to compensate employees for the next 2 years. The options are exercisable within a 4-year period beginning January 1, 2021, by grantees still in the employ of the company. The fair value of each option was $7 on the date of grant. Stoner expects to distribute 10,000 shares of treasury stock when options are exercised. The treasury stock was acquired by Stoner during 2018 at a cost of $28 per share and was recorded under the cost method. How much should Stoner charge to compensation expense for the year ended December 31, 2019?
a.$35,000
b.$70,000
c.$15,000
d.$30,000
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, 2021, Wildhorse Inc. granted stock options to officers and key employees for the purchase of 23,000 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 $330,600.
On April 1, 2022, 2,300 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, 13,800 options were exercised when the market price of the common stock was $39 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…
Chapter 15 Solutions
INTERM.ACCT.:REPORTING...-CENGAGENOWV2
Ch. 15 - Prob. 1GICh. 15 - Prob. 2GICh. 15 - What are the three components and the basic...Ch. 15 - List the various rights of a shareholder. Which do...Ch. 15 - What is the meaning of the following terms: (a)...Ch. 15 - Prob. 6GICh. 15 - Prob. 7GICh. 15 - How does preferred stock differ from common stock?Ch. 15 - What amount of the proceeds from the issuance of...Ch. 15 - Prob. 10GI
Ch. 15 - Prob. 11GICh. 15 - Prob. 12GICh. 15 - Prob. 13GICh. 15 - Prob. 14GICh. 15 - Prob. 15GICh. 15 - Prob. 16GICh. 15 - Prob. 17GICh. 15 - Prob. 18GICh. 15 - Prob. 19GICh. 15 - How is a preferred stock similar to a long-term...Ch. 15 - Prob. 21GICh. 15 - Prob. 22GICh. 15 - Prob. 23GICh. 15 - Prob. 24GICh. 15 - Prob. 25GICh. 15 - What additional disclosures about preferred and...Ch. 15 - Prob. 1MCCh. 15 - Cary Corporation has 50,000 shares of 10 par...Ch. 15 - What is the most likely effect of a stock split on...Ch. 15 - Prob. 4MCCh. 15 - Prob. 5MCCh. 15 - Prob. 6MCCh. 15 - Prob. 7MCCh. 15 - When treasury stock is purchased for cash at more...Ch. 15 - Preferred stock that may be retired by the...Ch. 15 - When treasury stock accounted for by the cost...Ch. 15 - Brown Corporation issues 800 shares of its 5 par...Ch. 15 - Heart Corporation entered into a subscription...Ch. 15 - Blue Corporation issues 200 packages of securities...Ch. 15 - Sun Corporation issues 500 shares of 8 par common...Ch. 15 - Next Level Morgan Corporation issues 500 packages...Ch. 15 - Prob. 6RECh. 15 - On January 1, 2019, Phoenix Corporation adopts a...Ch. 15 - On January 2, 2019, Brust Corporation grants its...Ch. 15 - Prob. 9RECh. 15 - Assume Cole Corporation originally issued 300...Ch. 15 - Violet Corporation issues 1,200 shares of 150 par...Ch. 15 - Assume that Lily Corporation has outstanding 1,500...Ch. 15 - Tulip Corporation uses the cost method to account...Ch. 15 - Par Value and No-Par Stock Issuance Caswell...Ch. 15 - Combined Sale of Stock Maxville Company issues 300...Ch. 15 - Sale of Stock with Bonds Pilsen Company issues 12%...Ch. 15 - Issuance of Stock for Land Putt Company issues 500...Ch. 15 - Prob. 5ECh. 15 - Prob. 6ECh. 15 - Prob. 7ECh. 15 - Prob. 8ECh. 15 - Restricted Share Units On January 2, 2019, Dekker...Ch. 15 - Prob. 10ECh. 15 - Convertible Preferred Stock On January 2, 2019,...Ch. 15 - Prob. 12ECh. 15 - Stock Rights with Preferred Stock Nelson...Ch. 15 - Various Journal Entries Lodi Company is authorized...Ch. 15 - Treasury Stock, Cost Method On January 1, Lorain...Ch. 15 - Contributed Capital Adams Companys records provide...Ch. 15 - Prob. 17ECh. 15 - Treasury Stock, Cost and Par Value Methods On...Ch. 15 - Treasury Stock, No Par Propst-Steele Production...Ch. 15 - Subscriptions On August 3, 2019, the date of...Ch. 15 - Prob. 2PCh. 15 - Prob. 3PCh. 15 - Prob. 4PCh. 15 - Prob. 5PCh. 15 - Prob. 6PCh. 15 - Issuances of Stock Cada Corporation is authorized...Ch. 15 - Issuances of Stock Epple Corporation is authorized...Ch. 15 - Comprehensive Young Corporation has been operating...Ch. 15 - Comprehensive The shareholders equity section of...Ch. 15 - Treasury Stock Analysis Ray Holt Corporation has...Ch. 15 - Comprehensive Byrd Companys Contributed Capital...Ch. 15 - Prob. 13PCh. 15 - Prob. 14PCh. 15 - Reconstruct Journal Entries At the end of its...Ch. 15 - Treasury Stock, Cost Method Bush-Caine Company...Ch. 15 - Prob. 17PCh. 15 - Prob. 1CCh. 15 - Prob. 2CCh. 15 - Prob. 3CCh. 15 - Capital Stock Capital stock is an important area...Ch. 15 - Treasury Stock A corporation sometimes engages in...Ch. 15 - Prob. 6CCh. 15 - Prob. 7CCh. 15 - Compensatory Share Option Plan Tom Twitlet,...Ch. 15 - Prob. 9CCh. 15 - Treasury Stock For numerous reasons, a corporation...Ch. 15 - Prob. 11CCh. 15 - Prob. 12CCh. 15 - Prob. 13CCh. 15 - Prob. 14C
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- On January 1, 2021, Nash 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 $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 $333,000.On April 1, 2022, 2,200 options were terminated when the employees resigned from the company. The market price of the common stock was $33 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.arrow_forwardOn 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 2023arrow_forwardOn January 1, 2021, Windsor Inc. granted stock options to officers and key employees for the purchase of 23,000 shares of the company’s $10 par common stock at $26 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 $324,400.On April 1, 2022, 2,300 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, 13,800 options were exercised when the market price of the common stock was $40 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 are…arrow_forward
- On June 1, 2020, ABC Company granted share options to key employees for the purchase of 42,000 of company’s ordinary share capital at P25 per share. Based on an Black-Scholes option pricing model used by the company, the fair value of each share option on this date was P10. The options are intended to compensate employees for the next two years. The options are exercisable within a four-year period beginning July 1, 2022 by grantees still in the employ of the company. The market price of Tool’s ordinary shares was P40 per share at the date of grant. No share options were terminated during the year. How much should ABC’s share to compensation expense for the year ended December 31, 2020?arrow_forwardOn November 1, 2019, Sheridan Corp. adopted a stock option plan that granted options to key executives to purchase 42,300 common shares. The options were granted on January 2, 2020, and were exercisable two years after the date of grant if the grantee was still a company employee; the options expire six years from the date of grant. The option price was set at $39, and total compensation expense was estimated to be $541,000. Note that the calculation did not take forfeitures into account. On April 1, 2021, 3,300 options were terminated when some employees resigned from the company. The fair value of the shares at that date was $26. All of the remaining options were exercised during the year 2022: 29,600 on January 3 when the fair value was $49, and 9,400 on May 1 when the fair value was $55 a share. Assume that the entity follows ASPE and has chosen not to reflect forfeitures in its upfront estimate of compensation expense. (a) Prepare journal entries relating to the stock option plan…arrow_forwardOn January 1, 2021, Buffalo Inc. granted stock options to officers and key employees for the purchase of 18,000 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 $351,600.On April 1, 2022, 1,800 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, 10,800 options were exercised when the market price of the common stock was $39 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.arrow_forward
- On January 1, 2021, Crane Company granted stock options to officers and key employees for the purchase of 18000 shares of the company's $1 par common stock at $18 per share as additional compensation for services to be rendered over the next three years. The options are exercisable during a five-year period beginning January 1,2024 by grantees still employed by Crane. The Black-Scholes option pricing model determines total compensation expense to be $180300. The market price of common stock was $24 per share at the date of grant. The journal entry to record the compensation expense related to these options for 2021 would include a credit to the Paid-in Capital-Stock Options account for O $0. O $36060. O $60100. O $32400.arrow_forwardConcord Company establishes a stock-appreciation rights program that entitles its new president Ben Davis to receive cash for the difference between the market price of the stock and a pre-established price of $33 (also market price) on December 31, 2021, on 37,700 SARs. The date of grant is December 31, 2021, and the required employment (service) period is 4 years. President Davis exercises all of the SARS in 2027. The fair value of the SARS is estimated to be $6 per SAR on December 31, 2022; $10 on December 31, 2023; $14 on December 31, 2024; $6 on December 31, 2025; and $17 on December 31, 2026. (a) Prepare a 5-year (2022-2026) schedule of compensation expense pertaining to the 37,700 SARS granted president Davis. (If the compensation decreases from prior year enter the amount as a negative number in the table eg -25,000 or (25,000)) Cumulative Compensation Recognizable Date 12/31/22 $ 12/31/23 12/31/24 12/31/25 Fair Value Percentage Accrued % $ Compensarrow_forwardOn January 1, 2022, Ron Corp. granted stock options to key employees for the purchase of 80,000 shares of the company's common stock at $25 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, 2024, by the grantees still in the employ of the company. No options were terminated during 2022, 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 $31 per share at the date of the grant. G Corp. used the Binomial pricing model and estimated the fair value of each of the options at $10. What amount should Ron charge to compensation expense for the year ended December 31, 2022? A. $307,200. B. $320,000. C. $384,000. D. $400,000.arrow_forward
- On January 1, 2024, Jingrong Corporation granted stock options to key employees for the purchase of 81,000 shares of the company's common stock at $28 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, 2026, by the grantees still in the employ of the company. No options were terminated during 2024, but the company does have an experience of 6% forfeitures over the life of the stock options. The market price of the common stock was $34 per share at the date of the grant. Jingrong Corporation used the Binomial pricing model and estimated the fair value of each of the options at $10. What amount should Jingrong charge to compensation expense for the year ended December 31, 2024? Multiple Choice $405,000 $810,000 $380,700 $761,400arrow_forwardOn 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…arrow_forwardOn January 1, 2020, The Akira Corporation granted stock options to one of its employees. The options allow the employee to purchase 10,000 common Akira shares with par value of $ 5 to $ 20 each. On the grant date, the Black-Scholes option pricing model indicated that the fair value of the options was $ 220,000. The options can be exercised beginning on January 1, 2022, after the employee has provided two years of service to the company. Assuming that the company closes books on December 31 of each year, what impact does the adjustment transaction at 12/31/20 related to this event have on the Net income (presented in the Statement of Income and Expenses) Total Equity of the Shareholders (after closing) Select one: to. Decrease of $ 220,000 Zero b. Decrease of $ 110,000 Decrease of $ 110,000 c. $ 110,000 increase Decrease of $ 110,000 d. Decrease of $ 110,000 Zeroarrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Individual Income TaxesAccountingISBN:9780357109731Author:HoffmanPublisher:CENGAGE LEARNING - CONSIGNMENT
Intermediate Accounting: Reporting And AnalysisAccountingISBN:9781337788281Author:James M. Wahlen, Jefferson P. Jones, Donald PagachPublisher:Cengage Learning
Individual Income Taxes
Accounting
ISBN:9780357109731
Author:Hoffman
Publisher:CENGAGE LEARNING - CONSIGNMENT
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:Cengage Learning