On January 1, 2020, Sandhill Corporation granted 4,700 options to executives. Each option entitles the holder to purchase one share of Sandhill's $5 par value common stock at $50 per share at any time during the next 5 years. The market price of the stock is $63 per share on the date of grant. The fair value of the options at the grant date is $142,000. The period of benefit is 2 years. Prepare Sandhill's journal entries for January 1, 2020, and December 31, 2020 and 2021. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.) Date Account Titles and Explanation Debit Credit
Q: On January 1, 2020, Barwood Corporation granted 5,000 options to executives. Each option entitles…
A: The annual compensation expense is calculated as follows: The annual compensation expense is…
Q: Riyo Company granted 100 share options to each of its 200 employees on January 1, 2020. Each option…
A: Share option means where the employees is given share free of cost or at very nominal value if the…
Q: On January 1, 2020, COLOR Company granted 250 share options to 300 employees, conditional upon the…
A: Compensation expense = number of x number of options x fair value of option xExpired periodTotal…
Q: On July 1, 2019, Windsor Company adopted a stock-option plan that granted options to key executives…
A: Date Particulars Debit Credit 01-02-2020 No entry (date of grant ; total compensation cost…
Q: On November 1, 2020, Sage Company adopted a stock-option plan that granted options to key executives…
A: Date Account titles and explanation Debit Credit 1/2/2021 No entry…
Q: On July 1, 2016, Task Company granted share options to key employees for the purchase of 20,000 of…
A: Answer: 1 July,2016 Employees share stock option = 20000 Fair value of option = P9 Exercise Period =…
Q: 10,000 ordinary shares of P10 par value. The options call for a price of P25 per share and are…
A: Compensatory share options are the shares given to the employee's or other with the option to buy at…
Q: On January 1, Year 1, Sisig Corp. granted 60,000 share options to employees. The share options will…
A: Note: Compensation expense is allocated during the grat date to the vesting date. Expense can not be…
Q: On November 1, 2020, Novak Company adopted a stock-option plan that granted options to key…
A: Journal entry is the first step in process of accounting which is recording of financial data; the…
Q: Nadal Company has 20 executives to whom it grants compensatory share options on January 1, 2019. At…
A: 1. TOTAL ESTIMATED VALUE OF THE OPTIONS PER EMPLOYEE = 90 X $8 = $720 2. TOTAL ESTIMATED VALUE OF…
Q: On January 1, 2020, Jangga Group grants share options to each of its 100 employees working in the…
A: Employee compensation through the stock option is recognized at fair value over the vesting period…
Q: On July 1, 2016, Tools Company granted share options to key employees for the purchase of 20,000 of…
A: Share options are a form of benefit provided to the employees of the company. It means rights are…
Q: On January 1,2020, V Co. issued 100 share options to each of its 15 executive officers. The options…
A: Employee stock option plan is a type of compensation plan that is offered to managerial personnel,…
Q: On January 1, 2020, the entity granted share options of 100,000 ordinary shares (with par valu of…
A: Share Premium upon exercise of share options = Number of granted share Options x (Exercise Price -…
Q: On January 1, 2021, Titania Inc. granted stock options to officers and key employees for the…
A: Stock options: A stock option gives a right to the option holder (investor) to exercise the option…
Q: On January 1, 2020, Crane Corporation granted 5,200 options to executives. Each option entitles the…
A: Employee Stock Option: When a company grants an employee stock option (ESO), it is referring to a…
Q: On January 1, 2020, ABC Company granted share options to each of the 300 employees working in the…
A: Employee stock options (ESOs) are a type of equity compensation given to employees and executives by…
Q: On January 1, Year 1, Spaghetti Corp. granted 100 share options each to 500 employees, conditional…
A: S.NO Particulars YEAR 1 YYEAR 2 YEAR 3 1. Total No. of employees 500 500 500 2. Employees…
Q: On January 1, 2020, the entity granted share options of 100,000 ordinary shares (with par value of…
A: Share premium per share = Fair value of the share options on the date of the grant x No. of share…
Q: On January 1, 2021, Crane Company granted stock options to officers and key employees for the…
A: Stock options: A kind of grant remitted to the workforce of an organization which permits them to…
Q: On January 1, 2019, Nichols Corporation granted 10,000 options to key executives. Each option allows…
A: Given information is: On January 1, 2019, Nichols Corporation granted 10,000 options to key…
Q: On January 1, 2020, ABC Company granted share options to each of the 300 employees working in the…
A: The amount received by a business entity by issuing shares at an amount higher than its par value is…
Q: On November 1, 2020, Sweet Company adopted a stock-option plan that granted options to key…
A: Stock Option Plan: A stock option plan is a plan under which the company grants stock options to…
Q: Items 23 to 26 are based on the Following Information: On January 1, 2019, an entity granted 100…
A: Computation Of Compensation Expense For 2019: a Number Of Employees On Grant Date 500 b…
Q: On January 1, 2021, Trent Company granted Dick Williams, an employee, an option to buy 400 shares of…
A: Given, Total compensation expense=$5,400Service period=2years
Q: What is the compensation expense for 2020?
A: Solution:- Given, ABC Company granted the president compensatory share to buy shares on January 1,…
Q: On January 1, 2021, Windsor Inc. granted stock options to officers and key employees for the…
A: The calculations are:
Q: On January 1, Year 1, Jenny Corp. granted 60,000 share options to employees. The share options will…
A: Note: Compensation expense is allocated during the grat date to the vesting date. Expense can not be…
Q: On January 1, 2020, the entity granted share options of 100,000 ordinary shares (with par value of…
A: Share premium per share = Fair value of the share options on the date of the grant x No. of share…
Q: On January 1, 2021, Ellison Company granted Sam Wine, an employee, an option to buy 1,000 shares of…
A: Employers use various share-based payment schemes as a part of the remuneration package in order not…
Q: Binomial pricing model and estimated the fair value of each of the options at $10. What amount…
A: Expected options to be vested = 86000*94% = 80840 Fair value of the option : 10 Vesting…
Q: On January 1, 2020, Barwood Corporation granted 5,000 options to executives. Each option entitles…
A: Date Account Titles and Explanation Debit Credit January 1, 2020 No Entry required…
Q: Corinthians granted 5,000 share options to employees at an exercise price of P5 per share. The…
A: 2021 Compensation expense = 4500 options x P402.5 years× 1 year…
Q: On January 1, 2020, Prospero Games Inc. granted stock options to managers and key employees under…
A: Employees stock option Plan Employees stock option plan which is considered to be the best option…
Q: On January 1, Year 1, Sisig Corp. granted 60,000 share options to employees. The share options will…
A: Note: Compensation expense is allocated during the grat date to the vesting date. Expense can not be…
Q: On January 1, 2020, Myeoong Company granted 60,000 share options to employees. The share options…
A: Upon exercise of equity options on December 31, 2023, Following journal entry will be passed:…
Q: Nadal Company has 20 executives to whom it grants compensatory share options on January 1, 2019. At…
A: Employees Stock option Plan: The employee Stock option is the reward for the employee from the…
Q: On January 1,2020, V Co. issued 100 share options to each of its 15 executive officers. The options…
A: Compensation Expense means all expenses and costs associated with compensation and benefits provided…
Q: On June 1, 2020, ABC Company granted share options to key employees for the purchase of 42,000 of…
A: Number of stock option = 42,000 Fair value of stock option = P10 Vesting period = 4 Years
Q: Nadal Company has 20 executives to whom it grants compensatory share options on January 1, 2019. At…
A: Total estimated compensation expense for 18 executives (20-2) = 18×120×$8.5 =$18,360
Q: On January 1, 2020, the entity granted share options of 100,000 ordinary shares (with par value of…
A: Share premium per share = Fair value of the share options on the date of the grant x No. of share…
Q: On January 1, Year 1, Spaghetti Corp. granted 100 share options each to 500 employees, conditional…
A: Total Compensation Expense booked upto Year 2 [(500 - 30 - 30) * 100 share option * P30 * 2 /3]…
Q: How much is the share options outstanding as of the 2nd year in the exercise period assuming out of…
A: An employee stock option gives the right to employees to purchase a pre specified number of shares…
Q: On January 1, 2010, Barwood Corporation granted 5,000 options to executives. Each option entitles…
A: Annual expense=Total compensation expenseBenefit period=$150,0002=$75,000
Q: On January 1, 2021, Nash Inc. granted stock options to officers and key employees for the purchase…
A: An accounting record for a business uses a journal entry to document a commercial transaction. The…
Q: On January 1, 2020, ABC Company granted 80,000 share options to employees. The share options will…
A: Compensation expense for 2022 = (Share prices on December 31, 2022 - option price ) x no. of shares…
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
- On January 1, 2019, Phoenix Corporation adopts a performance-based share option plan for 25 executives, with the number of shares based on the yearly increase in sales. At the end of 2019, based on a 10% increase in sales, it expects that each executive will be granted 150 options and that the fair value of an option expected to vest is 15.75. Phoenix expects a turnover rate of 15% over the 3-year service period. Determine the compensation expense for 2019 for this plan.On January 1, 2020, Crane Corporation granted 5,200 options to executives. Each option entitles the holder to purchase one share of Crane's $5 par value common stock at $50 per share at any time during the next 5 years. The market price of the stock is $66 per share on the date of grant. The fair value of the options at the grant date is $136,000. The period of benefit is 2 years. Prepare Crane's journal entries for January 1, 2020, and December 31, 2020 and 2021. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)On January 1, 2020, Waldorf Corporation granted 40,000 options to key executives. Each option allows the executive to purchase one share of Waldorf’s common shares at a price of $30 per share. The options were exercisable within a two–year period beginning January 1, 2022, if the grantee was still employed by the company at the time of the exercise. On the grant date, Waldorf’s shares were trading at $25 per share, and a fair value options pricing model determined total compensation to be $1,680,000. Management has assumed that there will be no forfeitures because they do not expect any of the key executives to leave. On May 1, 2022, 12,000 options were exercised when the market price of Waldorf’s shares was $34 per share. The remaining options lapsed in 2023 because executives decided not to exercise them. Management was indeed correct in their assumption regarding forfeitures in that all executives remained with the company. Assume that Waldorf follows IFRS. Prepare the…
- On January 1, 2020, Barwood Corporation granted 5,000 options to executives. Each option entitles the holder to purchase one share of Barwood's $5 par value common stock at $50 per share at any time during the next 5 years. The market price of the stock is $65 per share on the date of grant. The fair value of the options at the grant date is $150,000. The period of benefit is 2 years. Prepare Barwood's journal entries for January 1, 2020, and December 31, 2020 and 2021.On January 1, 2020, Barwood Corporation granted 5,000 options to executives. Each option entitles the holder to purchase one share of Barwood's $5 par value common stock at $50 per share at any time during the next 5 years. The market price of the stock is $65 per share on the date of grant. The fair value of the options at the grant date is $150,000. The period of benefit is 2 years. Prepare Barwood's journal entries for January 1, 2020, and December 31, 2020 and 2021. Repeat the requirements assuming that instead of options, Barwood granted 2,000 shares of restricted stock.On January 1, 2020, Oriole Corporation granted 19,400 options to key executives. Each option allows the executive to purchase one share of Oriole's common shares at a price of $20 per share. The options were exercisable within a two- year period beginning January 1, 2022, if the grantee was still employed by the company at the time of the exercise. On the grant date, Oriole's shares were trading at $15 per share, and a fair value options pricing model determined total compensation to be $800,000. Management has assumed that there will be no forfeitures because they do not expect any of the key executives to leave. On May 1, 2022, 5,820 options were exercised when the market price of Oriole's shares was $26 per share. The remaining options lapsed in 2023 because executives decided not to exercise them. Management was indeed correct in their assumption regarding forfeitures in that all executives remained with the company. Assume that Oriole follows IFRS. Required: Prepare the necessary…
- On November 1, 2020, Ayayai Company adopted a stock-option plan that granted options to key executives to purchase 27,300 shares of the company’s $10 par value common stock. The options were granted on January 2, 2021, and were exercisable 2 years after the date of grant if the grantee was still an employee of the company. The options expired 6 years from date of grant. The option price was set at $30, and the fair value option-pricing model determines the total compensation expense to be $409,500.All of the options were exercised during the year 2023: 18,200 on January 3 when the market price was $68, and 9,100 on May 1 when the market price was $78 a share.Prepare journal entries relating to the stock option plan for the years 2021, 2022, and 2023. Assume that the employee performs services equally in 2022 and 2023.On January 1, 2020, ABC Company granted share options to each of the 300 employees working in the Accounting department. The options price is P90 and the par value is P70 per share.The share options vest at the end of a three-year period provided that the employees remain in the entity’s employ and provided the volume of sales will increase by 10% per year.The fair value of each share option on grant date is P35.The share will vest as follows: If the sales increase by 10%, each employee will receive 200 share options; If the sales increase by 15%, each employee will receive 300 share options.· On December 31, 2020, the sales increased by 10%, and no employees have left the entity· On December 31, 2021, sales increased by 15% and no employees have left.On December 31, 2022, the sales increased by 15% and 50 employees left the entityWhat is the share premium upon exercise of the share options on December 31, 2022?On January 1, 2020, ABC Company granted share options to each of the 300 employees working in the Accounting department. The options price is P90 and the par value is P70 per share.The share options vest at the end of a three-year period provided that the employees remain in the entity’s employ and provided the volume of sales will increase by 10% per year. The fair value of each share option on grant date is P35. The share will vest as follows: If the sales increase by 10%, each employee will receive 200 share options; If the sales increase by 15%, each employee will receive 300 share options. · On December 31, 2020, the sales increased by 10%, and no employees have left the entity· On December 31, 2021, sales increased by 15% and no employees have left.On December 31, 2022, the sales increased by 15% and 50 employees left the entityWhat is the compensation expense for 2022?
- On January 1, 2010, Barwood Corporation granted 5,000 options to executives. Each option entitles the holder to purchase one share of Barwood’s $5 par value common stock @ $50 per share at anytime during the next 5 years. The market price of the stock is $65 per share on the date of the grant. The period of benefit is 2 years. The Black – Scholes option pricing model determines total compensation expense to be $150,000. All options were excerised on December 31, 2012. Prepare Barwood’s journal entries for January 1, 2010, December 31, 2010, 2011, and 2012, using the fair value method.On January 1, 2024, Swifty Corporation granted 9,100 options to key executives. Each option allows the executive to purchase one share of Swifty's $5 par value common stock at a price of $21 per share. The options were exercisable within a 2-year period beginning January 1, 2026, if the grantee is still employed by the company at the time of the exercise. On the grant date, Swifty's stock was trading at $26 per share, and a fair value option-pricing model determines total compensation to be $402,000. On May 1, 2026, 7,280 options were exercised when the market price of Swifty's stock was $30 per share. The remaining options lapsed in 2028 because executives decided not to exercise their options. Prepare the necessary journal entries related to the stock option plan for the years 2024 through 2028. (List all debit entries before credit entries. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for…On January 1, 2019, Nichols Corporation granted 10,000 options to key executives. Each option allows the executive to purchase one share of Nichols' $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, Nichols' stock was trading at $25 per share, and a fair value option-pricing model determines total compensation to be $400,000. On May 1, 2021, 8,000 options were exercised when the market price of Nichols' stock was $30 per share. The remaining options lapsed in 2023 because executives decided not to exercise their options. Instructions Prepare the necessary journal entries related to the stock option plan for the years 2019 through 2023.