Stock options : Stock options are the stock-based compensation plans provided in the form of an option to buy certain number of shares for a certain price during certain period. Journal entry : Journal entry is a set of economic events which can be measured in monetary terms. These are recorded chronologically and systematically. Debit and credit rules: Debit an increase in asset account, increase in expense account, decrease in liability account, and decrease in stockholders’ equity accounts. Credit decrease in asset account, increase in revenue account, increase in liability account, and increase in stockholders’ equity accounts. To journalize : The expired options before being exercised in the books of Corporation N

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Exercise 19-2O (Algo) EPS; shares issued; stock options [LO19-6, 19-7, 19-8, 19-9] Stanley Department Stores reported net income of $776,000 for the year ended December 31, 2021. Additional Information: Common shares outstanding Incentive stock options (vested in 2020) outstanding throughout 2021 (Each option is exercisable for one common share at an exercise price of $23.00) During the year, the market price of Stanley's common stock averaged $27.60 per share. On Aug. 30, Stanley sold 15,000 common shares. Stanley's only debt consisted of $36, 000 of 10% short-term bank notes. The company's income tax rate is 25%. Jan. 1, 2021 90,000 24,000 Required: Compute Stanley's basic and diluted earnings per share for the year ended December 31, 2021. (Enter your answers in thousands. Do not round intermediate calculations) Numerator Denominator Earnings per Share Basic %3D Diluted %3D

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Chapter 19, Problem 19.7BE

To determine

Stock options: Stock options are the stock-based compensation plans provided in the form of an option to buy certain number of shares for a certain price during certain period.

Journal entry: Journal entry is a set of economic events which can be measured in monetary terms. These are recorded chronologically and systematically.

Debit and credit rules:

Debit an increase in asset account, increase in expense account, decrease in liability account, and decrease in stockholders’ equity accounts.

Credit decrease in asset account, increase in revenue account, increase in liability account, and increase in stockholders’ equity accounts.

To journalize: The expired options before being exercised in the books of Corporation N

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Exercise 19-2O (Algo) EPS; shares issued; stock options [LO19-6, 19-7, 19-8, 19-9] Stanley Department Stores reported net income of $776,000 for the year ended December 31, 2021. Additional Information: Common shares outstanding Incentive stock options (vested in 2020) outstanding throughout 2021 (Each option is exercisable for one common share at an exercise price of $23.00) During the year, the market price of Stanley's common stock averaged $27.60 per share. On Aug. 30, Stanley sold 15,000 common shares. Stanley's only debt consisted of $36, 000 of 10% short-term bank notes. The company's income tax rate is 25%. Jan. 1, 2021 90,000 24,000 Required: Compute Stanley's basic and diluted earnings per share for the year ended December 31, 2021. (Enter your answers in thousands. Do not round intermediate calculations) Numerator Denominator Earnings per Share Basic %3D Diluted %3D

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Question 3 On 6 July 2021, Falta Limited paid $300 to purchase a put option on Zebra Limited when the market price per ordinary shares was $120. The option gives Falta Limited to sell 500 shares at an exercise price of $120 and the option expires on 1 February 2022. Market price per share $ Time value of put Option $ Date 30 September 2021 31 December 2021 123 180 115 100 1 February 2022 112 30 Required: Prepare the journal entries for Falta for the following dates: (a) On 6 July 2021 to record the investment in the put option. (b) On 30 September 2021 when Falta Limited prepared the financial statements. (c) On 31 December 2021 when Falta Limited prepared the financial statements. (d) On 1 February 2022 when Falta Limited settled the call option.