Intermediate Accounting
3rd Edition
ISBN: 9780136912644
Author: Elizabeth A. Gordon; Jana S. Raedy; Alexander J. Sannella
Publisher: Pearson Education (US)
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Chapter 19, Problem 19.2P
a.
To determine
To calculate: The compensation cost to be recognized for the year.
Given Information:
Number of shares granted is 100,000.
Exercise price of the shares is $12.
Fair value at the grant date is $45.
Vesting period is 2 years.
Vesting probability is 100% in each year.
b.
To determine
The compensation expense for end of the year and journal entry of it.
Given Information:
Number of shares granted is 100,000.
Exercise price of the shares is $12.
Fair value at the grant date is $45.
Vesting period is 2 years.
Vesting probability is 100% in each year.
c.
To determine
The journal entry to record the actual exercise of stock option..
Given Information:
Number of shares granted is 100,000.
Exercise price of the shares is $12.
Fair value at the grant date is $45.
Vesting period is 2 years.
Vesting probability is 100% in each year.
d.
To determine
The value of compensation expense for the end of years and journal entry of it.
Given Information:
Number of shares granted is 100,000.
Exercise price of the shares is $12.
Fair value at the grant date is $45.
Vesting period is 2 years.
Vesting probability is 100% in first year.
Vesting probability is 80% in second year.
e.
To determine
The value of compensation expense for the end of years and journal entry of it.
Given Information:
Number of shares granted is 100,000.
Exercise price of the shares is $12.
Fair value at the grant date is $45.
Vesting period is 2 years.
Vesting probability is 100% in first year.
Vesting probability is 80% in second year.
Unexercised options expired rate is 25%.
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Accounting for Stock Options
On April 1 of Year 1, Badger Corp. announced a stock option incentive plan for its top executives. The plan provides certain executives stock options for the company's common stock.
Each option allows for the purchase of one share of common stock, par $1, at a standard option price of $25 per share. The rights are nontransferable and are exercisable three years
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b.…
LCI Cable Company grants 1 million performance stock options to key executives at January 1, 2018. Theoptions entitle executives to receive 1 million of LCI $1 par common shares, subject to the achievement ofspecific financial goals over the next four years. Attainment of these goals is considered probable initially andthroughout the service period. The options have a current fair value of $12 per option.Required:1. Prepare the appropriate entry when the options are awarded on January 1, 2018.2. Prepare the appropriate entries on December 31 of each year 2018–2021.3. Suppose at the beginning of 2020, LCI decided it is not probable that the performance objectives will be met.Prepare the appropriate entries on December 31 of 2020 and 2021.
On January 1 of Year 1, Holiday Inc. offered a stock option incentive plan to a top executive. The plan provided the executive 300 stock options for Holiday Inc. $1 par value, common stock at an option price of $15 per share through the expiration date of January 1 of Year 7. The fair value of the options based upon an option-pricing model on January 1 of Year 1, is $9,000. The market price at year-end of Holiday Inc. stock is $15 per share on January 1 of Year 1, and $18 on December 31 of Year 1. The requisite service period is 3 years. The options were not exercised due to the stock price remaining below $15 per share after the vesting period.
Record the entry on January 1 of Year 7 for the expiration of the stock options.
Note: If a line in a journal entry isn't required for the transaction, select "N/A—debit" and "N/A—credit" as the account names and leave the Dr. and Cr. answers blank (zero).
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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