Intermediate Accounting
3rd Edition
ISBN: 9780136912644
Author: Elizabeth A. Gordon; Jana S. Raedy; Alexander J. Sannella
Publisher: Pearson Education (US)
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Question
Chapter 19, Problem 19.2BE
To determine
The treatment of employee stock option by a company and journal entries at the date of grant.
Giveninformation:
Number of shares offered is 1,000 shares.
Fair value is $12.
Market price and exercise price both is $6.
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Assume that TPL has a stock-option plan for top management. Each stock option represents the right to purchase a share of TPL $1 par value common stock in the future at a price equal to the fair value of the stock at the date of the grant. TPL has 75,0 00 stock options outstanding, which were granted at the beginning of 2020. The following data relate to the option grant: Exercise price for options $31; Market price at grant date (January 1, 2020) $31; Fair value of options at grant date (January 1, 2020) $2; Service period 4 years.
Prepare the journal entry (ies) for the first year of the plan.
Prepare the journal entry (ies) for the first year of the plan assuming that, rather than options, 2,500 shares of restricted stock were granted at the beginning of 2020.
Now assume that the market price of TPL stock on the grant was $35 per share. Repeat the requirements for (a) and (b).
TPL eould like to implement an employee stock-purchase plan for rank-and-file employees,but it would like…
Assume that Amazon.com has a stock-option plan for top management. Each stock option represents the right to purchase a share of Amazon $1 par value common stock in the future at a price equal to the fair value of the stock at the date of the grant. Amazon has 5,000 stock options outstanding, which were granted at the beginning of 2020. The following data relate to the option grant.
Exercise price for options
1$40
Market price at grant date (January 1, 2020)
1$40
Fair value of options at grant date (January 1, 2020)
1$6
Service period
15 years
Instructions
a. Prepare the journal entry(ies) for the first year of the stock-option plan.
b. Prepare the journal entry(ies) for the first year of the plan assuming that, rather than options, 700 shares of restricted stock were granted at the beginning of 2020.
c. Now assume that the market price of Amazon stock on the grant date was $45 per share. Repeat the requirements for (a) and (b).
d. Amazon would like to…
Assume that Amazon.com has a stock-option plan for top management. Each stock option represents the right to purchase a share of
Amazon $1 par value common stock in the future at a price equal to the fair value of the stock at the date of the grant. Amazon has
5,700 stock options outstanding, which were granted at the beginning of 2020. The following data relate to the option grant.
Exercise price for options
$39
Market price at grant date (January 1, 2020)
$39
Fair value of options at grant date (January 1, 2020)
$6
Service period
5 years
Chapter 19 Solutions
Intermediate Accounting
Ch. 19 - What is the allocation period used to expense...Ch. 19 - How do companies account for stock-based...Ch. 19 - Do companies with equity-based compensation plans...Ch. 19 - When accounting for employee stock options, will a...Ch. 19 - Prob. 19.5QCh. 19 - Prob. 19.6QCh. 19 - Prob. 19.7QCh. 19 - Prob. 19.8QCh. 19 - Prob. 19.9QCh. 19 - Prob. 19.10Q
Ch. 19 - Prob. 19.1MCCh. 19 - Prob. 19.2MCCh. 19 - Prob. 19.3MCCh. 19 - Prob. 19.4MCCh. 19 - Prob. 19.5MCCh. 19 - Prob. 19.6MCCh. 19 - Prob. 19.7MCCh. 19 - Prob. 19.8MCCh. 19 - Prob. 19.1BECh. 19 - Prob. 19.2BECh. 19 - Prob. 19.3BECh. 19 - Prob. 19.4BECh. 19 - Prob. 19.5BECh. 19 - Prob. 19.6BECh. 19 - Employee Stock Options, Liability-Classified...Ch. 19 - Prob. 19.8BECh. 19 - Prob. 19.9BECh. 19 - Prob. 19.10BECh. 19 - Prob. 19.11BECh. 19 - Prob. 19.12BECh. 19 - Prob. 19.13BECh. 19 - Prob. 19.14BECh. 19 - Prob. 19.15BECh. 19 - Prob. 19.16BECh. 19 - Prob. 19.17BECh. 19 - Prob. 19.18BECh. 19 - Prob. 19.19BECh. 19 - Prob. 19.20BECh. 19 - Prob. 19.21BECh. 19 - Prob. 19.22BECh. 19 - Prob. 19.23BECh. 19 - Prob. 19.24BECh. 19 - Prob. 19.25BECh. 19 - Prob. 19.26BECh. 19 - Prob. 19.27BECh. 19 - Prob. 19.28BECh. 19 - Prob. 19.1ECh. 19 - Prob. 19.2ECh. 19 - Employee Stock Options. Equity-Classified Awards....Ch. 19 - Prob. 19.4ECh. 19 - Prob. 19.5ECh. 19 - Prob. 19.6ECh. 19 - Prob. 19.7ECh. 19 - Prob. 19.8ECh. 19 - Prob. 19.9ECh. 19 - Prob. 19.10ECh. 19 - Prob. 19.11ECh. 19 - Prob. 19.12ECh. 19 - Prob. 19.13ECh. 19 - Prob. 19.14ECh. 19 - Prob. 19.15ECh. 19 - Prob. 19.16ECh. 19 - Prob. 19.1PCh. 19 - Prob. 19.2PCh. 19 - Prob. 19.3PCh. 19 - Prob. 19.4PCh. 19 - Prob. 19.5PCh. 19 - Prob. 19.6PCh. 19 - Prob. 19.7PCh. 19 - Prob. 19.8PCh. 19 - Prob. 19.9PCh. 19 - Prob. 19.10PCh. 19 - Prob. 19.11PCh. 19 - Prob. 19.12PCh. 19 - Prob. 1JCCh. 19 - Prob. 2FSCCh. 19 - Prob. 1SSCCh. 19 - Prob. 2SSCCh. 19 - Basis for Conclusions Case 1: Are Employee Stock...Ch. 19 - Prob. 2BCC
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