Tri-Facet Ltd. issued 28,750 stock options on January 1, 2021, allowing its Chief Executive Officer (CEO) to purchase common shares at $7 each. An options pricing model was used to determine that the options have a fair value of $168,762. The CEO cannot exercise the stock options until January 1, 2024. The stock options vest over the period of January 1, 2021 to December 31, 2023. The stock options expire on December 31, 2027. The CEO exercised 60% of the stock options on November 5, 2027. The remaining options expired. The market prices of the common shares of Tri-Facet Ltd. were as follows: Date Market Price Per Share Jan. 1, 2021 $7 Dec. 31, 2021 $8 Dec. 31, 2022 $10 Dec. 31, 2023 $11 Nov. 5, 2027 $10 Required: Prepare any journal entries required for Tri-Facet Ltd. on each of the following dates: January 1, 2021 December 31, 2022 November 5, 2027 December 31, 2027

Tri-Facet Ltd. issued 28,750 stock options on January 1, 2021, allowing its Chief Executive Officer (CEO) to purchase common shares at $7 each. An options pricing model was used to determine that the options have a fair value of $168,762. The CEO cannot exercise the stock options until January 1, 2024. The stock options vest over the period of January 1, 2021 to December 31, 2023. The stock options expire on December 31, 2027. The CEO exercised 60% of the stock options on November 5, 2027. The remaining options expired. The market prices of the common shares of Tri-Facet Ltd. were as follows: Date Market Price Per Share Jan. 1, 2021 $7 Dec. 31, 2021 $8 Dec. 31, 2022 $10 Dec. 31, 2023 $11 Nov. 5, 2027 $10 Required: Prepare any journal entries required for Tri-Facet Ltd. on each of the following dates: January 1, 2021 December 31, 2022 November 5, 2027 December 31, 2027

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

Chapter16: Retained Earnings And Earnings Per Share

Section: Chapter Questions

Problem 10MC

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Q. M Company issued 99,000 stock options to key executives on January 1, 2021. The options must be exercised by December 31, 2023, and will expire on January 1, 2027. Each option entitles the holder to one share of $1 par ordinary stock for $12. On the date of award, an option-pricing model estimates the fair value of the options to be $4. What should M deduct as compensation expense in 2021?
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, 2020, Hage Corporation granted incentive stock options to purchase 26,000 of its common shares at $7 each. The options are exercisable after one year. The market price of common averaged $8 per share during the quarter ending on March 31, 2021. There was no change in the 220,000 shares of outstanding common stock during the quarter ended March 31, 2021. Net income for the quarter was $9,068. The number of shares to be used in computing diluted earnings per share for the quarter is: (Round your final answer to whole number.)
Top Rock Corporation has an executive stock option plan which grants the Chief Executive Officer (CEO) the ability to purchase common shares following the conclusion of a vesting period. The CEO exercised some of the stock options she received on November 14, 2024. The CEO allowed the remainder of the options to lapse. Details regarding the stock option plan follow: Number of shares that can be purchased by the CEO: 35,360 Option price per share $ 18.00 Market price per share on January 1, 2021 $ 18.00 Market price per share on November 14, 2024 $ 23.40 Number of stock options exercised by CEO on November 14, 2024: 22,984 The vesting period for the stock option plan is January 1, 2021 to December 31, 2022. The exercise period for the stock option plan is January 1, 2023 to December 31, 2025. Top Rock Corporation determines, using an option-pricing model, that each option has the following fair value on January 1, 2021: $ 4.00. Top Rock has a year end of December 31. Assume that Top…
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