On January 1, 2019, a company granted 100,000 options to key executives. Each option allows the executive to purchase one share of the company’s $16 par value common stock at a price of $42 per share. The options were exercisable within a 2-year period beginning January 1, 2022. On the grant date, a fair value option-pricing model determines total compensation to be $300,000. On January 1, 2022, 6,000 options were exercised. In the journal entry to record the exercise, how much should be recorded for Paid-in Capital in Excess of Par – common stock

On January 1, 2019, a company granted 100,000 options to key executives. Each option allows the executive to purchase one share of the company’s $16 par value common stock at a price of $42 per share. The options were exercisable within a 2-year period beginning January 1, 2022. On the grant date, a fair value option-pricing model determines total compensation to be $300,000. On January 1, 2022, 6,000 options were exercised. In the journal entry to record the exercise, how much should be recorded for Paid-in Capital in Excess of Par – common stock

Financial Accounting Intro Concepts Meth/Uses

14th Edition

ISBN:9781285595047

Author:Weil

Publisher:Weil

Chapter15: Shareholders’ Equity: Capital Contributions And Distributions

Section: Chapter Questions

Problem 19E

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On January 1, 2019, Phoenix Corporation adopts a performance-based share option plan for 25 executives, with the number of shares based on the yearly increase in sales. At the end of 2019, based on a 10% increase in sales, it expects that each executive will be granted 150 options and that the fair value of an option expected to vest is 15.75. Phoenix expects a turnover rate of 15% over the 3-year service period. Determine the compensation expense for 2019 for this plan.
On January 1, 2019, a company granted 10,000 options to key executives. Each option allows the executive to purchase one share of the company’s $5 par value common stock at a price of $20 per share. The options were exercisable within a 7-year period beginning January 1, 2022, if the grantee is still employed by the company at the time of the exercise. On the grant date, a fair value option-pricing model determines total compensation to be $792,000. How much compensation expense should be recorded on 12/31/2020? If no compensation expense should be recorded on 12/31/2020, please enter 0. Rounded to the nearest dollar, if necessary.
1.On January 1, 2019, a company granted 100,000 options to key executives. Each option allows the executive to purchase one share of the company's $14 par value common stock at a price of $44 per share. The options were exercisable within a 2-year period beginning January 1, 2022. On the grant date, a fair value option-pricing model determines total compensation to be $800,000. On January 1, 2022, 1,000 options were exercised. In the journal entry to record the exercise, how much should be recorded for Paid-in Capital in Excess of Par – common stock? 2.A company issued 13,000 shares of $22 par value common stock upon conversion of 24,000 shares of $34 par value preferred stock. The preferred stock was originally issued at $43 per share. The common stock is trading at $22 per share at the time of conversion. In the journal entry to record the conversion of the preferred stock, how much should we record for Paid-in Capital in Excess of Par - common stock?
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
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On January 1, 2021, a company granted stock options for 89,000 shares of its $12 par value common stock to its key employees. Each option entitles the employees to purchase one share of common stock at $22. The Black-Scholes option pricing model determines total compensation expense to be $220,000. The options are exercisable beginning January 1, 2024. On January 1, 2024, when the market price of the stock was $35 per share, 5,000 options were exercised. To record the 5,000 options exercised, the company should record Cash in the amount of $__________. (if no cash amount should be recorded, then enter 0).
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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.
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On 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…
On January 1, 2019, Pepin Company adopts a compensatory share option plan for its 50 executives. The plan allows each executive to purchase 200 shares of its $2 par common stock for $30 per share after completing a 3-year service period. Pepin estimates the value of each option to be $14 on the grant date, and the company expects that 15% of the options will be forfeited and uses this rate in its compensation cost calculations in 2019. At the end of 2021, Pepin determined that the actual turnover was 7 executives for the entire service period. On January 6, 2022, 8 executives exercise their options. Required: 1. Prepare a schedule of Pepin’s compensation computations for its compensatory share option plan for 2019 through 2021. 2. Prepare Pepin’s journal entries for 2019 through 2022 in regard to this plan.
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