The correct option. Given information: Number of Shares as Employee Stock Option on January 1 is 2,000 shares. Purchase price of share as on January 1 is $40. Fair Value of the options totaled as on January 1 is $20,000. Price at which the stock was sold in December 31, Year 1 is $45. Price at which the stock was sold in December 31, Year 2 is $55.

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Answer 1

Question

Chapter 19, Problem 19.2MC

To determine

To identify: The correct option.

Given information:

Number of Shares as Employee Stock Option on January 1 is 2,000 shares.

Purchase price of share as on January 1 is $40.

Fair Value of the options totaled as on January 1 is $20,000.

Price at which the stock was sold in December 31, Year 1 is $45.

Price at which the stock was sold in December 31, Year 2 is $55.

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Answer 2

Question

Chapter 19, Problem 19.2MC

To determine

To identify: The correct option.

Given information:

Number of Shares as Employee Stock Option on January 1 is 2,000 shares.

Purchase price of share as on January 1 is $40.

Fair Value of the options totaled as on January 1 is $20,000.

Price at which the stock was sold in December 31, Year 1 is $45.

Price at which the stock was sold in December 31, Year 2 is $55.

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Answer 3

Question

Chapter 19, Problem 19.2MC

To determine

To identify: The correct option.

Given information:

Number of Shares as Employee Stock Option on January 1 is 2,000 shares.

Purchase price of share as on January 1 is $40.

Fair Value of the options totaled as on January 1 is $20,000.

Price at which the stock was sold in December 31, Year 1 is $45.

Price at which the stock was sold in December 31, Year 2 is $55.

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Answer 4

Question

Chapter 19, Problem 19.2MC

To determine

To identify: The correct option.

Given information:

Number of Shares as Employee Stock Option on January 1 is 2,000 shares.

Purchase price of share as on January 1 is $40.

Fair Value of the options totaled as on January 1 is $20,000.

Price at which the stock was sold in December 31, Year 1 is $45.

Price at which the stock was sold in December 31, Year 2 is $55.

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Answer 5

Chapter 19, Problem 19.2MC

To determine

To identify: The correct option.

Given information:

Number of Shares as Employee Stock Option on January 1 is 2,000 shares.

Purchase price of share as on January 1 is $40.

Fair Value of the options totaled as on January 1 is $20,000.

Price at which the stock was sold in December 31, Year 1 is $45.

Price at which the stock was sold in December 31, Year 2 is $55.

Answer 6

Chapter 19, Problem 19.2MC

To determine

To identify: The correct option.

Given information:

Number of Shares as Employee Stock Option on January 1 is 2,000 shares.

Purchase price of share as on January 1 is $40.

Fair Value of the options totaled as on January 1 is $20,000.

Price at which the stock was sold in December 31, Year 1 is $45.

Price at which the stock was sold in December 31, Year 2 is $55.

Answer 7

Chapter 19, Problem 19.2MC

To determine

To identify: The correct option.

Given information:

Number of Shares as Employee Stock Option on January 1 is 2,000 shares.

Purchase price of share as on January 1 is $40.

Fair Value of the options totaled as on January 1 is $20,000.

Price at which the stock was sold in December 31, Year 1 is $45.

Price at which the stock was sold in December 31, Year 2 is $55.

Answer 8

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Answer 9

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Answer 10

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Answer 11

Ch. 19 - What is the allocation period used to expense...Ch. 19 - How do companies account for stock-based...Ch. 19 - Do companies with equity-based compensation plans...Ch. 19 - When accounting for employee stock options, will a...Ch. 19 - Prob. 19.5Q Ch. 19 - Prob. 19.6Q Ch. 19 - Prob. 19.7Q Ch. 19 - Prob. 19.8Q Ch. 19 - Prob. 19.9Q Ch. 19 - Prob. 19.10Q

Solution Summary: The author explains that employee stock option d is the correct option. The company grants stock options to employees for a limited time period.

Concept explainers

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Chapter 19 Solutions