On January 1, 2019, Bramble Corp. granted Sam Wine, an employee, an option to buy 1,000...
On January 1, 2018, Sheridan Company granted Dic Williams, an
employee, an option to buy 500 shares of Sheridan Co. stock for $30
per share, the option exercisable for 5 years from date of grant.
Using a fair value option pricing model, total compensation expense
is determined to be $5240. Williams exercised his option on
September 1, 2018, and sold his 500 shares on December 1, 2018.
Quoted market prices of Sheridan Co. stock during 2018
were:
January 1
$28...
On January 1, 2021, D Corp. granted an employee an option to purchase 7,500 shares of D's $4 par common stock at $23 per share. The options became exercisable on December 31, 2022, after the employee completed two years of service. The option was exercised on January 10, 2023. The market prices of D's stock were as follows: January 1, 2021, $36; December 31, 2022, $55; and January 10, 2023, $47. An option pricing model estimated the value of the...
5.(2 points) On January 1, 2018, Evans Company granted its employee, an option to buy 5,000 shares of Evans Co. stock for $25 per share, the option exercisable for 5 years from January 1, 2020. Using a fair value option pricing model, total compensation expense is determined to be $38,000. One employee resigned from Evans on 10/1/2019 which caused the termination of 1,000 shares of the options. The service period is for two years beginning January 1, 2018. How will...
On January 1, 2019, Riverbed Corporation granted 11,000 options to key executives. Each option allows the executive to purchase one share of Riverbed’s $5 par value common stock at a price of $19 per share. The options were exercisable within a 2-year period beginning January 1, 2021, if the grantee is still employed by the company at the time of the exercise. On the grant date, Riverbed’s stock was trading at $25 per share, and a fair value option-pricing model...
On January 1, 2021, M Company granted 96,000 stock options to certain executives. The options are exercisable no sooner than December 31, 2023, and expire on January 1, 2027. Each option can be exercised to acquire one share of $1 par common stock for $9. An option-pricing model estimates the fair value of the options to be $3 on the date of grant. What amount should M recognize as compensation expense for 2021? ---- On January 1, 2021, M Company...
E16 11B (L0 3) (Issuance, Exercise, and Termination of Stock Options) On January 1, 2019, EZ Inc. granted stock options to officers and key employees for the purchase of 250,000 shares of the company’s $1 par common stock at $86 per share. The options were exercisable within a 5-year period beginning January 1, 2021, by grantees still in the employ of the company, and expiring December 31, 2023. The service period for this award is 2 years. Assume that the...
On January 1, 2019, Cullumber Corporation granted 10,300 options to key executives. Each option allows the executive to purchase one share of Cullumber's $5 par value common stock at a price of $20 per share. The options were exercisable within a 2-year period beginning January 1, 2021, if the grantee is still employed by the company at the time of the exercise. On the grant date, Cullumber's stock was trading at $26 per share, and a fair value option-pricing model...
On January 1, 2016, Watchtower Corporation granted Emma Freegross, its president, a compensatory stock option plan to purchase 8,000 shares of Watchtower's $10 par common stock. The option price is $25 per share and the option has a fair value of $7 per option. The option is exercisable on January 1, 2020, after four years of service. How much compensation expense should Watchtower recognize on December 31, 2016. 56,000 14,000 80,000 0
On January 1, 2018, Hugh Morris Comedy Club (HMCC) granted 1.2 million stock options to key executives exercisable for 1.2 million shares of the company’s common stock at $24 per share. The stock options are intended as compensation for the next three years. The options are exercisable within a four-year period beginning January 1, 2021, by the executives still in the employ of the company. No options were terminated during 2018. The market price of the common stock was $28...
On January 1, 2018, Hugh Morris Comedy Club (HMCC) granted 1.5 million stock options to key executives exercisable for 1.5 million shares of the company’s common stock at $24 per share. The stock options are intended as compensation for the next three years. The options are exercisable within a four-year period beginning January 1, 2021, by the executives still in the employ of the company. No options were terminated during 2018. The market price of the common stock was $28...