What amount of compensation expense should Sheridan recognize as a result of this plan for the year ended December 31, 2021 under the fair value method? A. $1508000 B. $2633000 C. $754000 D. $1658000
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In order to retain certain key executives, Sheridan Company granted them incentive stock options on December 31, 2020. 144000 options were granted at an option price of $35 per share. Market prices of the stock were as follows:
December 31, 2021
$44 per share
December 31, 2022
49 per share
The options were granted as compensation for executives’ services to be rendered over a two-year period beginning January 1, 2021. The Black-Scholes option pricing model determines total compensation expense to be $1508000. What amount of compensation expense should Sheridan recognize as a result of this plan for the year ended December 31, 2021 under the fair value method?
A. $1508000
B. $2633000
C. $754000
D. $1658000
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- In order to retain certain key executives, Wildhorse Corporation granted them incentive stock options on December 31, 2024. A total of 152000 options were granted at an option price of $35 per share. Market prices of the stock were as follows: December 31, 2025 December 31, 2026 The options were granted as compensation for executives' services to be rendered over a two-year period beginning January 1, 2025. The Black-Scholes option-pricing model determined total compensation expense to be $1501000. $44 per share 49 per share What amount of compensation expense should Wildhorse recognize as a result of this plan for the year ended December 31, 2025 under the fair value method? O $750500 $1653000 $1501000 $2622950Hua Xin Services offered an incentive stock option plan to its employees. On January 1, 2024, options were granted for 90,000 $1 par common shares. The exercise price equals the $5 market price of the common stock on the grant date. The options cannot be exercised before January 1, 2027, and expire December 31, 2028. Each option has a fair value of $1 based on an option pricing model. What is the total compensation cost for this plan?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?
- XYZ 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 XYZ deduct as compensation expense in 2021?Moonlnc. granted their executives incentive stock options on January 1, 2017. On this date, 275,000 shares of the company's $5 par value common stock were granted at an option price of $40 per share. On the grant date, the market price of the stock was $50 per share. Market prices of the stock were as follows: December 31, 2018 December 31, 2019 The Black-Scholes option pricing model determines total compensation expense to be $1,500,000. The service period for the options is 2 years. The options were exercisable beginning on January 1, 2025 for employees still working at Moonlnc. The options expire on December 31, 2029. What journal entry should the company make on January 1, 2023 under the fair value method? On June 1, 2025, 68,750 options were exercised and the market price on this date was $75. What amount should be debited to Paid-in Capital - Stock Options? a)$375,000 b)$750,000 c)$0.00 d)$1,656,250 $70 per share $82 per shareWalters Audio Visual Inc. offers and incentive stock option plan to its regional managers. On January 1, 2021, options were granted for 28 million $1 par common shares. The exercise price is the market price on the grant date-$8 per share. Options cannot be exercised prior to January 1, 2023, and expire December 31, 2027. The fair value of the 28 million options, estimated by an appropriate option pricing model, is $1 per option. Required: Determine the total compensation cost pertaining to the incentive stock option plan. Total compensation cost ___________________ million To 5. Prepare the appropriate journal entries to record compensation expense on December 31, 2021 and 2022. Prepare the appropriate journal entry to record the exercise of 75% of the options on March 12, 2023, when the market price is $9 per share and the entry on December 31, 2027, when the remaining options that have vested expire without being exercised. Record compensation expense on December…
- Walters Audio Visual Inc. offers an incentive stock option plan to its regional managers. On January 1, 2021, options were granted for 72 million $1 par common shares. The exercise price is the market price on the grant date—$8 per share. Options cannot be exercised prior to January 1, 2023, and expire December 31, 2027. The fair value of the 72 million options, estimated by an appropriate option pricing model, is $1 per option. Required: 1. Determine the total compensation cost pertaining to the incentive stock option plan.2. to 5. Prepare the appropriate journal entries to record compensation expense on December 31, 2021 and 2022. Prepare the appropriate journal entry to record the exercise of 75% of the options on March 12, 2023, when the market price is $9 per share and the entry on December 31, 2027, when the remaining options that have vested expire without being exercised.Walters Audio Visual Inc. offers an incentive stock option plan to its regional managers. On January 1, 2021, options were granted for 40 million $1 par common shares. The exercise price is the market price on the grant date-$8 per share. Options cannot be exercised prior to January 1, 2023, and expire December 31, 2027. The fair value of the 40 million options, estimated by an appropriate option pricing model, is $1 per option. Required: 1. Determine the total compensation cost pertaining to the incentive stock option plan. 2. to 5. Prepare the appropriate journal entries to record compensation expense on December 31, 2021 and 2022. Prepare the appropriate journal entry to record the exercise of 75% of the options on March 12, 2023, when the market price is $9 per share and the entry on December 31, 2027, when the remaining options that have vested expire without being exercised. Complete this question by entering your answers in the tabs below. Req 1 Req 2 to 5 Prepare the…1 Record compensation expense on December 31, 2021. 2 Record compensation expense on December 31, 2022. 3 Record the exercise of 75% of the options on March 12, 2023, when the market price is $10 per share. 4 Record expiration of options.
- Walters Audio Visual Inc. offers an incentive stock option plan to its regional managers. On January 1, 2021, options were granted for 40 million $1 par common shares. The exercise price is the market price on the grant date—$8 per share. Options cannot be exercised prior to January 1, 2023, and expire December 31, 2027. The fair value of the 40 million options, estimated by an appropriate option pricing model, is $1 per option.Required:1. Determine the total compensation cost pertaining to the incentive stock option plan.2. Prepare the appropriate journal entry to record compensation expense on December 31, 2021.3. Prepare the appropriate journal entry to record compensation expense on December 31, 2022.4. Prepare the appropriate journal entry to record the exercise of 75% of the options on March 12, 2023, when the market price is $9 per share.5. Prepare the appropriate journal entry on December 31, 2027, when the remaining options that have vested expire without being exercised.Walters Audio Visual Inc. offers an incentive stock option plan to its regional managers. On January 1, 2021, options were granted for 40 million $1 par common shares. The exercise price is the market price on the grant date—$8 per share. Options cannot be exercised prior to January 1, 2023, and expire December 31, 2027. The fair value of the 40 million options, estimated by an appropriate option pricing model, is $1 per option. Prepare the appropriate journal entry to record the exercise of 75% of the options on March 12, 2023, when the market price is $9 per share and the entry on December 31, 2027, when the remaining options that have vested expire without being exercised. Record expiration of options.Martinez Audio Visual Incorporated offers an incentive stock option plan to its regional managers. On January 1, 2024, options were granted for 72 million $1 par common shares. • The exercise price is the market price on the grant date-$8 per share. • Options cannot be exercised prior to January 1, 2026, and expire December 31, 2030. • The fair value of the 72 million options, estimated by an appropriate option pricing model, is $1 per option. Required: 1. Determine the total compensation cost pertaining to the incentive stock option plan. 2. to 5. Prepare the appropriate journal entries to record compensation expense on December 31, 2024 and 2025. Prepare the appropriate journal entry to record the exercise of 75% of the options on March 12, 2026, when the market price is $9 per share and the entry on December 31, 2030, when the remaining options that have vested expire without being exercised. Complete this question by entering your answers in the tabs below. Req 1 Req 2 to 5…