Witter House is a calendar-year firm with 350 million common shares outstanding throughout 2024 and 2025. As part of its executive compensation plan, at January 1, 2023, the company had issued 55 million executive stock options permitting executives to buy 55 million shares of stock for $12 within the next eight years, but not prior to January 1, 2026. The fair value of the options was estimated on the grant date to be $3 per option. In 2024, Witter House began granting employees stock awards rather than stock options as part of its equity compensation plans and granted 20 million restricted common shares to senior executives at January 1, 2024. The shares vest four years later. The fair value of the stock was $13 per share on the grant date. The average price of the common shares was $13 and $20 during 2024 and 2025, respectively. The stock options qualify as an incentive plan. The restricted stock does not. The company's net income was $200 million and $210 million in 2024 and 2025, respectively. Required: Compute basic and diluted earnings per share for Witter House in 2024. Compute basic and diluted earnings per share for Witter House in 2025.

Witter House is a calendar-year firm with 350 million common shares outstanding throughout 2024 and 2025. As part of its executive compensation plan, at January 1, 2023, the company had issued 55 million executive stock options permitting executives to buy 55 million shares of stock for $12 within the next eight years, but not prior to January 1, 2026. The fair value of the options was estimated on the grant date to be $3 per option. In 2024, Witter House began granting employees stock awards rather than stock options as part of its equity compensation plans and granted 20 million restricted common shares to senior executives at January 1, 2024. The shares vest four years later. The fair value of the stock was $13 per share on the grant date. The average price of the common shares was $13 and $20 during 2024 and 2025, respectively. The stock options qualify as an incentive plan. The restricted stock does not. The company's net income was $200 million and $210 million in 2024 and 2025, respectively. Required: Compute basic and diluted earnings per share for Witter House in 2024. Compute basic and diluted earnings per share for Witter House in 2025.

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...

See similar textbooks

Similar questions

Witter House is a calendar-year firm with 300 million common shares outstanding throughout 2024 and 2025. As part of its executive compensation plan, at January 1, 2023, the company had issued 30 million executive stock options permitting executives to buy 30 million shares of stock for $10 within the next eight years, but not prior to January 1, 2026. The fair value of the options was estimated on the grant date to be $3 per option. In 2024, Witter House began granting employees stock awards rather than stock options as part of its equity compensation plans and granted 15 million restricted common shares to senior executives at January 1, 2024. The shares vest three years later. The fair value of the stock was $12 per share on the grant date. The average price of the common shares was $12 and $15 during 2024 and 2025, respectively. The stock options qualify as an incentive plan. The restricted stock does not. The company’s net income was $150 million and $160 million in 2024 and…
Witter House is a calendar-year firm with 410 million common shares outstanding throughout 2024 and 2025. As part of its executive compensation plan, at January 1, 2023, the company had issued 50 million executive stock options permitting executives to buy 50 million shares of stock for $15 within the next eight years, but not prior to January 1, 2026. The fair value of the options was estimated on the grant date to be $3 per option. In 2024, Witter House began granting employees stock awards rather than stock options as part of its equity compensation plans and granted 25 million restricted common shares to senior executives at January 1, 2024. The shares vest three years later. ⚫ The fair value of the stock was $20 per share on the grant date. The average price of the common shares was $20 and $25 during 2024 and 2025, respectively. The stock options qualify as an Incentive plan. The restricted stock does not The company's net Income was $260 million and $270 million in 2024 and…
Witter House is a calendar-year firm with 380 million common shares outstanding throughout 2024 and 2025. As part of its executive compensation plan, at January 1, 2023, the company had issued 35 million executive stock options permitting executives to buy 35 million shares of stock for $10 within the next eight years, but not prior to January 1, 2026. • The fair value of the options was estimated on the grant date to be $3 per option. • In 2024, Witter House began granting employees stock awards rather than stock options as part of its equity compensation plans and granted 20 million restricted common shares to senior executives at January 1, 2024. ⚫ The shares vest three years later. • The fair value of the stock was $14 per share on the grant date. • The average price of the common shares was $14 and $25 during 2024 and 2025, respectively. • The stock options qualify as an incentive plan. • The restricted stock does not. •The company's net income was $230 million and $240 million in…
Witter House is a calendar-year firm with 340 million common shares outstanding throughout 2024 and 2025. As part of its executive compensation plan, at January 1, 2023, the company had issued 50 million executive stock options permitting executives to buy 50 million shares of stock for $10 within the next eight years, but not prior to January 1, 2026. The fair value of the options was estimated on the grant date to be $3 per option. In 2024, Witter House began granting employees stock awards rather than stock options as part of its equity compensation plans and granted 25 million restricted common shares to senior executives at January 1, 2024. The shares vest three years later. The fair value of the stock was $20 per share on the grant date. The average price of the common shares was $20 and $25 during 2024 and 2025, respectively. The stock options qualify as an incentive plan. The restricted stock does not. The company's net income was $190 million and $200 million in 2024 and 2025,…
Witter House is a calendar-year firm with 300 million common shares outstanding throughout 2024 and 2025. As part of its executive compensation plan, at January 1, 2023, the company had issued 30 million executive stock options permitting executives to buy 30 million shares of stock for $10 within the next eight years, but not prior to January 1, 2026. • The fair value of the options was estimated on the grant date to be $3 per option. • In 2024, Witter House began granting employees stock awards rather than stock options as part of its equity compensation plans and granted 15 million restricted common shares to senior executives at January 1, 2024. • The shares vest three years later. • The fair value of the stock was $12 per share on the grant date. • The average price of the common shares was $12 and $15 during 2024 and 2025, respectively. • The stock options qualify as an incentive plan. • The restricted stock does not. • The company's net income was $150 million and $160 million…
Witter House is a calendar-year firm with 380 million common shares outstanding throughout 2021 and 2022. As part of its executive compensation plan, at January 1, 2020, the company had issued 35 million executive stock options permitting executives to buy 35 million shares of stock for $10 within the next eight years, but not prior to January 1, 2023. The fair value of the options was estimated on the grant date to be $3 per option. In 2021, Witter House began granting employees stock awards rather than stock options as part of its equity compensation plans and granted 20 million restricted common shares to senior executives at January 1, 2021. The shares vest four years later. The fair value of the stock was $14 per share on the grant date. The average price of the common shares was $14 and $25 during 2021 and 2022, respectively. The stock options qualify as an incentive plan. The restricted stock does not. The company's net income was $230 million and $240 million in 2021 and 2022,…
Witter House is a calendar-year firm with 430 million common shares outstanding throughout 2021 and 2022. As part of its executive compensation plan, at January 1, 2020, the company had issued 60 million executive stock options permitting executives to buy 60 million shares of stock for $12 within the next eight years, but not prior to January 1, 2023. The fair value of the options was estimated on the grant date to be $2 per option. In 2021, Witter House began granting employees stock awards rather than stock options as part of its equity compensation plans and granted 20 million restricted common shares to senior executives at January 1, 2021. The shares vest four years later. The fair value of the stock was $16 per share on the grant date. The average price of the common shares was $16 and $20 during 2021 and 2022, respectively. The stock options qualify as an incentive plan. The restricted stock does not. The company's net income was $280 million and $290 million in 2021 and 2022,…
S Witter House is a calendar-year firm with 460 million common shares outstanding throughout 2024 and 2025. As part of its executive compensation plan, at January 1, 2023, the company had issued 40 million executive stock options permitting executives to buy 40 million shares of stock for $10 within the next eight years, but not prior to January 1, 2026. • The fair value of the options was estimated on the grant date to be $3 per option. In 2024, Witter House began granting employees stock awards rather than stock options as part of its equity compensation plans and granted 25 million restricted common shares to senior executives at January 1, 2024. ⚫ The shares vest three years later. • The fair value of the stock was $16 per share on the grant date. ⚫ The average price of the common shares was $16 and $25 during 2024 and 2025, respectively. .The stock options qualify as an incentive plan. . The restricted stock does not. The company's net income was $310 million and $320 million in…
Witter House is a calendar-year firm with 300 million common shares outstanding throughout 2018 and 2019.As part of its executive compensation plan, at January 1, 2017, the company had issued 30 million executivestock options permitting executives to buy 30 million shares of stock for $10 within the next eight years, but notprior to January 1, 2020. The fair value of the options was estimated on the grant date to be $3 per option.In 2018, Witter House began granting employees stock awards rather than stock options as part of its equitycompensation plans and granted 15 million restricted common shares to senior executives at January 1, 2018.The shares vest four years later. The fair value of the stock was $12 per share on the grant date. The averageprice of the common shares was $12 and $15 during 2018 and 2019, respectively.The stock options qualify for tax purposes as an incentive plan. The restricted stock does not. The company’snet income was $150 million and $160 million in 2018…
Witter House is a calendar-year firm with 400 million common shares outstanding throughout 2018 and 2019. As part of its executive compensation plan, at January 1, 2017, the company had issued 45 million executive stock options permitting executives to buy 45 million shares of stock for $14 within the next eight years, but not prior to January 1, 2020. The fair value of the options was estimated on the grant date to be $3 per option. In 2018, Witter House began granting employees stock awards rather than stock options as part of its equity compensation plans and granted 25 million restricted common shares to senior executives at January 1, 2018. The shares vest four years later. The fair value of the stock was $20 per share on the grant date. The average price of the common shares was $20 and $30 during 2018 and 2019, respectively. The stock options qualify for tax purposes as an incentive plan. The restricted stock does not. The company's net income was $250 million and $260 million…
Accounting Witter House is a calendar-year firm with 470 million common shares outstanding throughout 2021 and 2022. As part of its executive compensation plan, at January 1, 2020, the company had issued 45 million executive stock options permitting executives to buy 45 million shares of stock for $12 within the next eight years, but not prior to January 1, 2023. The fair value of the options was estimated on the grant date to be $2 per option. In 2021, Witter House began granting employees stock awards rather than stock options as part of its equity compensation plans and granted 25 million restricted common shares to senior executives at January 1, 2021. The shares vest four years later. The fair value of the stock was $20 per share on the grant date. The average price of the common shares was $20 and $30 during 2021 and 2022, respectively. The stock options qualify as an incentive plan. The restricted stock does not. The company's net income was $320 million and $330 million in…
Cheng/Hamm Incorporated developed a business strategy that uses stock options as a major compensation incentive for its top executives. On January 1, 2024, 23 million options were granted, each giving the executive owning them the right to acquire five $1 par common shares. The exercise price is the market price on the grant date – $30 per share ($150 per option). Options vest on January 1, 2028. They cannot be exercised before that date and will expire on December 31, 2030. The fair value of the 23 million options, estimated by an appropriate option pricing model, is $49 per option. Ignore income tax. Cheng/Hamm's compensation expense in 2024 for these stock options was: Note: Round your answer to nearest whole dollar amount.