MANAGERIAL ACCOUNTING LL/W ACCESS
MANAGERIAL ACCOUNTING LL/W ACCESS
17th Edition
ISBN: 9781265537883
Author: Garrison
Publisher: MCG
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Chapter P, Problem 11Q
To determine

Segment is a component of a business or company that will generate revenue or costs related to operations. In managerial accounting a segment acts as a responsibility centre.

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On Jan 1, Year 1, White Co grants its three top employees, Mr. Blue, Ms. Orange, and Mrs. Green, 3,000 options each to purchase its $10-par common stock. Each option allows the purchase of 10 shares at $25 per share during Years 3 and 4. In order for these options to be exercisable, each of the top employees must demonstrate a high level of performance during years 1 and 2. The fair market value of these options was $90,000. At that grant date, Mr. Blue declined the offer. How much will White record for compensation expense each year for years 1 and 2?
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