On July 1, 2016, Tools Company granted share options to key employees for the purchase of 20,000 of the company’s ordinary share capital at P25 per share. Based on option-pricing model used by the company, the fair value of each share option on this date was P9. The options are intended to compensate employees for the next two years. The options are exercisable within a four-year period beginning July 1, 2018 by grantees still in the employ of the company. The market price of Tools’ ordinary share was P33 per share at the date of grant. No share options were terminated during the year. How much should Tools charge to compensations expense for the year ended December 31, 2016?

On July 1, 2016, Tools Company granted share options to key employees for the purchase of 20,000 of the company’s ordinary share capital at P25 per share. Based on option-pricing model used by the company, the fair value of each share option on this date was P9. The options are intended to compensate employees for the next two years. The options are exercisable within a four-year period beginning July 1, 2018 by grantees still in the employ of the company. The market price of Tools’ ordinary share was P33 per share at the date of grant. No share options were terminated during the year. How much should Tools charge to compensations expense for the year ended December 31, 2016?

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter15: Contributed Capital

Section: Chapter Questions

Problem 7RE: On January 1, 2019, Phoenix Corporation adopts a performance-based share option plan for 25...

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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 2, 2019, Brust Corporation grants its new CFO 2,000 restricted share units. Each of the time-vested restricted share units entitles the CFO to receive one share of Brust common stock if she remains an employee of the company for 4 years. On January 2, 2019, shares of Brusts 1 par value common are trading at 29.50 per share. The company estimates that the CFO will complete all 4 years of required service with the company. Prepare the journal that Brust should make each year to account for the restricted share units.
On July 1, 2016, Task Company granted share options to key employees for the purchase of 20,000 of the company's ordinary share capital at P25 per share. Based on option-pricing model used by the company, the fair value of each share option on this date was P9. The options are intended to compensate employees for the next two years. The options are exercisable within a four-year period beginning July 1, 2018 by grantees still in the employ of the company. The market price of Tasks' ordinary share was P33 per share at the date of grant. No share options were terminated during the year. 1. How much should Task charge to compensations expense for the year ended December 31, 2016?
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?
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?
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.
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.
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 $761,400
On January 1, 2025, Ivanhoe Company granted stock options to officers and key employees for the purchase of 19400 shares of the company's $1 par value common stock at $20 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, 2028 by grantees still employed by Ivanhoe. The Black-Scholes option-pricing model determined total compensation expense to be $188700. The market price of common stock was $26 per share at the date of grant. The journal entry to record the compensation expense related to these options for 2025 would include a credit to the Paid-in Capital- Stock Options account for $62900. O $37740. O $38800. O $0.
On January 1, 2020 Sams Company granted Jim Norman, an employee, an option to buy 300 shares of Sams stock for $40 per share. The option is exercisable for 5 years from date of grant. Using a fair value option pricing model, total compensation expense is determined to be $4,800. The market value for each share of stock is $55 a share. The service period for the stock compensation is for two years beginning January 1, 2020. Record the journal entries for 2020 and 2021.
On 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.
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