c. What are the cash-flow effects to Tyra in the year she receives the restricted stock, in the year the stock vests, and in the year she sells the stock if she makes an 83(b) election?
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- 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.Nadal Company has 20 executives to whom it grants compensatory share options on January 1, 2019. At that time, it grants each executive the right to purchase 100 shares of its $5 par common stock at $40 per share after a 3-year service period. The value of each option is estimated to be $10.25 on the grant date. Based on its average employee turnover rate each year, Nadal expects that 2 executives will not vest in the plan. At the end of 2021, Nadal confirms that the actual turnover was the same as expected. On January 5, 2022, 3 executives exercise their options. Required: Prepare Nadal’s journal entries for 2019 through 2022 in regard to its compensatory share option plan.On January 1, year 1, Tyra started working for Hatch Corporation. New employees must choose immediately between receiving 7 NQOs (each NQO provides the right to purchase for $5 per share 10 shares of Hatch stock) or 50 restricted shares. Hatch's stock price is $5 on Tyra's start date. Either form of equity-based compensation will vest in two years. Tyra believes that the stock will be worth $15 per share in two years and $25 in four years when she will sell the stock. Tyra's marginal tax rate is 32 percent and her long-term capital gains rate is 15 percent. Assuming that Tyra's price predictions are correct, answer the following questions (ignore present value, and use nominal dollars): (List cash outflows as negative amounts. Leave no answers blank. Enter zero if applicable.) a. What are the cash-flow effects to Tyra in the year she receives the options, in the year the options vest and she exercises the options, and in the year she sells the stock if she chooses the NQOs? b. What are…
- Required information [The following information applies to the questions displayed below.] On January 1, year 1, Tyra started working for Hatch Corporation. New employees must choose immediately between receiving 7 NQOs (each NQO provides the right to purchase for $5 per share 10 shares of Hatch stock) or 50 restricted shares. Hatch's stock price is $5 on Tyra's start date. Either form of equity-based compensation will vest in two years. Tyra believes that the stock will be worth $15 per share in two years and $25 in four years when she will sell the stock. Tyra's marginal tax rate is 32 percent and her long-term capital gains rate is 15 percent. Assuming that Tyra's price predictions are correct, answer the following questions (ignore present value, and use nominal dollars): (List cash outflows as negative amounts. Leave no answers blank. Enter zero if applicable.) c. What are the cash-flow effects to Tyra in the year she receives the restricted stock, in the year the stock vests, and…Nadal Company has 20 executives to whom it grants compensatory share options on January 1, 2019. At that time, it grants each executive the right to purchase 90 shares of its $5 par common stock at $38 per share after a 3-year service period. The value of each option is estimated to be $8.00 on the grant date. Based on its average employee turnover rate each year, Nadal expects that 2 executives will not vest in the plan. At the end of 2021, Nadal confirms that the actual turnover was the same as expected. On January 5, 2022, 2 executives exercise their options.On January 1, 2018, Red Inc. grants to an employee the right to choose either 1,000 phantom shares (i.e. a right to a cash payment equal to the fair value of 1,000 shares) or 1,200 shares with a par value of P10 per share. The grant is conditional upon the completion of three years' service. If the employee chooses the share alternative, the shares must be held for three years after the vesting date. At the date of grant, the entity's share price is P50 per share. At the end of year 2018, 2019 and 2020, the share price is P52, P55 and P60, respectively. The entity does not expect to pay dividends in the next three years. After taking into account the effects of the post-vesting transfer restrictions, the entity estimates that the grant date fair value of the share alternative is P48per share. If the employee has chosen the cash alternative, the amount to be paid at the end of 2020 should be A.P60,000B.P52,000C.P55,000D.P67,600
- On April 17, Year 1, Barry, a CEO for ABC Corporation, is granted 10,000 ISOs at an exercise price of $30. On May 6, Year 2, he exercises all his options when the price of ABC stock is $57. What is the earliest date Barry can sell the ISO shares and avoid a disqualifying disposition? March 10, Year 3. May 16, Year 4. April 30, Year 3. O June 17, Year 3.Darius Inc. granted 200,000 stock options to its employees. The options expire 10 years after the grant date of January 1, 2021. The share price was $23 when the options were issued. Employees who are still with the company five years after the grant date may exercise the options to purchase shares at $45 per share. A consultant has estimated the value of each option on the grant date to be $2.50 per option. How much compensation expense should Darius Inc. record in 2021? Question 5 options: $460,000 $500,000 $880,000 $100,000On January 1, year 1, Dave received 1,000 shares of restricted stock from his employer, RRK Corporation. On that date, the stock price was $7 per share. Dave's restricted shares will vest at the end of year 2. He intends to hold the shares until the end of year 4, when he intends to sell them to help fund the purchase of a new home. Dave predicts the share price of RRK will be $30 per share when his shares vest and will be $40 per share when he sells them. (Leave no answer blank. Enter zero if applicable. Input all amounts as positive values.) b. If Dave's stock price predictions are correct, what are the tax consequences of these transactions to RRK? Таx Benefit Grant date $ Vesting date Sale date $
- On January 1, year 1, Dave received 1,000 shares of restricted stock from his employer, RRK Corporation. On that date, the stock price was $7 per share. Dave's restricted shares will vest at the end of year 2. He intends to hold the shares until the end of year 4, when he intends to sell them to help fund the purchase of a new home. Dave predicts the share price of RRK will be $30 per share when his shares vest and willI be $40 per share when he sells them. (Leave no answer blank. Enter zero if applicable. Input all amounts as positive values.) b. If Dave's stock price predictions are correct, what are the tax consequences of these transactions to RRK? Tax Benefit Grant date Vesting date Sale dateCarmichael Co. adopted a stock option plan for its top executives. Under the plan, each option granted would allow an executive to purchase one share of Carmichael’s $10 par valuecommon stock for $40 per share. On January 1, 2020, Carmichael granted the executives 60,000 options. The options were non-transferable and the executive had to remain an employee of the company to exercise the options. The options were exercisable within a 2-year period beginning on January 1, 2022. It is assumed that the options were for services performed equally in 2020 and 2021. The Black-Scholes option pricing model determines total compensation expense to be $1,200,000.On July 1, 2022, 45,000 options were exercised. Required: Based on the information above, prepare the entries required from January 1, 2020, through July 1, 2022.On January 1, year 1, Dave received 1,000 shares of restricted stock from his employer, RRK Corporation. On that date, the stock price was $7 per share. Dave's restricted shares will vest at the end of year 2. He Intends to hold the shares until the end of year 4, when he intends to sell them to help fund the purchase of a new home. Dave predicts the share price of RRK will be $30 per share when his shares vest and will be $40 per share when he sells them. Note: Leave no answer blank. Enter zero if applicable. Input all amounts as positive values. Required: a. If Dave's stock price predictions are correct, what are the taxes due on these transactions to Dave if his ordinary marginal rate is 32 percent and his long-term capital gains rate is 15 percent? b. If Dave's stock price predictions are correct, what are the tax consequences of these transactions to RRK? Answer is complete but not entirely correct. Complete this question by entering your answers in the tabs below. Required A…