On January 1, 2020, Green Company had issued executive share options permitting executives to buy 40,000 shares for P25 per share. The vesting schedule is 20% the first year, 30% the second year, and 50% the third year (graded-vesting). Vesting date: December 31, 2020, Amount vesting: 20%, Fair value per option: 10; Vesting date: December 31, 2021, Amount vesting: 30%, Fair value per option: 15; Vesting date: December 31, 2022, Amount vesting: 50%, Fair value per option: 20. Assuming the entity used the straight line method, what amount of compensation expense should be recorded in 2020?
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: On January 1,2020, V Co. issued 100 share options to each of its 15 executive officers. The options…
A: Compensation expense = Number of employees × Number of options granted × Fair value ×Expired…
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 October 15, 2020, the board of directors of Ensor Materials Corporation approved a stock option…
A: “Since you have posted a question with multiple sub-parts, we will solve first three sub-parts for…
Q: Holden Company has a share appreciation rights plan for its key executives. This SAR plan gives each…
A: Journal Entry In Journal entry ,any transactions either economic or non-economic are recorded and…
Q: On January 1, 2020, The Red Hot Company established a share option plan for its selected senior…
A:
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 June 30, 2019, New York Company granted compensatory share options for 30,000 P20 par value…
A: Employees Stock Option Plan- Employees Stock Option Plan is an option given to the employees of the…
Q: On January 2, 2020, Jones Company purchases a call option for $300 on Merchant common stock. The…
A: A ) Journal entry:
Q: 1. Determine the total compensation cost pertaining to the options on January 1, 2021. 2. Prepare…
A: Financial accounting: Financial accounting is the process of recording, summarizing, and reporting…
Q: On November 1, 2020, DaBaby Company adopted a stock-option plan that granted options to key…
A: Employees 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, Panic Company granted to a senior executive 30,000 share options, conditional…
A: A company can compensate its employees with shares in the business. The intention is to align…
Q: On January 1, 2020, Marie Company granted 200 share options to 300 employees, conditional upon the…
A: Share option means where the employees is given share free of cost or at very nominal value if the…
Q: On January 1,2019, an entity granted 100 share options each to 500 employees, conditional upon…
A: “Since you have posted a question with multiple sub-parts, we will solve first three sub-parts for…
Q: On January 1, 2020 share options were granted to employees where they can purchase 100,000 ordinary…
A: Share-Based Payment:- It is a payment where company receives goods or service either in…
Q: On January 1, 2020 share options were granted to employees where they can purchase 100,000 ordinary…
A: Total fair value of options granted = Fair value per share x No. of shares granted = P40 per share x…
Q: On January 1, 2021, Adams-Meneke Corporation granted 15 million incentive stock options to division…
A: 1.Compute total compensation as follows: Result: Therefore the total compensation is $360 million.…
Q: On January 1, 2018, Adams-Meneke Corporation granted 25 million incentive stock options to division…
A: 1) Total Compensation cost on January 1, 2018 = No. of Stock options*Fair Value of Option Total…
Q: Spaulding Inc. granted their executives incentive stock options on January 1, 2023. On this date,…
A: Stock options can be defined as an equity compensation that is granted to the employees by their…
Q: On January 1, 2020, XYZ Co. granted options to key executives to purchase 100,000 shares of the…
A: Journal entry is a primary entry that records the financial transactions initially.
Q: .On January 1, 2019, Kamagong Company granted 100 share options each to 500 employees, conditional…
A: Total expected cost = No. of share options per employee x no. of employees x fair value per option…
Q: On January 1, 2020, ABC Company granted to employees a share-based payment with cash and share…
A: Share premium will be recorded on the basis of the price of issuance date. Since shares are issued…
Q: On January 1, 2021, Adams-Meneke Corporation granted 25 million incentive stock options to division…
A:
Q: On January 1, 2020, ABC Corporation granted an employee an option to purchase 3,000 shares of ABC’s…
A: Intrinsic value(30-20) = 10 ( market value for January 2020 is 30 and purchase value is…
Q: January 1, 20x1, Mimosa Company grants 10,000 share options with a 10-year life to each of the 12…
A: Employee Stock Ownership Plan is the benefit plan given to the existing employees of the company.…
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: Under its executive stock option plan, Western Corporation granted options on January1, 2021, that…
A: Stockholder's equity: Stockholder's equity is the amount inclusive of shares held and the retained…
Q: During 2020, Empresas ABC issued 4,000 preferred shares with a par value of $ 10 to $ 11 each. Each…
A: Compute total number of common shares converted from preferred share options as shown below:
Q: Under its executive stock option plan, National Corporation granted 12 million options on January 1,…
A: Given information is: Number of options granted = 12 million options Fair value of option = $5 per…
Q: On June 30, 2019, New York Company granted compensatory share options for 30,000 P20 par value…
A: Answer option- (A) 5700000
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: On January 1, 2018, ABC Co. established a share appreciation rights plan for the executives. The…
A: FOR YEAR 2018 ON 1 JANUARY, 2018 ON 31 DECEMBER, 2018 EQUITY ALTERNATIVE (60000 *20) 1200000…
Q: On January 1, 2020, Cherry Red Company issued 10,000 share options for the purchase of P 100 par…
A: No. of options = 10,000 Fair value of options = P 20 vesting period = 3 (31 December 2020 to 31…
Q: what is the compensation expense related to the options to be recorded in 2022?
A: IFRS 2 deals with Share based payments. In share based payments, the compensation expense is the…
Q: On April 1, 2020, Gamma Corp. purchases a call option for $ 500, which gives Gamma the right to buy…
A: Options contract provide option holder a right to enter into a transaction at a particular price for…
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 January 1, 2021, Major Corp. granted its employees an option to purchase 5,000 of Major's common…
A: Employee Stock Option Plan: It is an employee benefit plan to participate in the Employee Stock…
Q: Ivanhoe Corp. purchased a put option on Mykia common shares on July 7, 2020, for $468. The put…
A: Put Option:-It is a financial derivative instrument that gives the right to the holder to sell the…
Q: On January 1, 2020 share options were granted to employees where they can purchase 100,000 ordinary…
A: 1. Share-Based Payment:- It is a payment where company receives goods or service either in…
Q: At January 1, 2021, the company had issued 40,000 executive stock options permitting executives to…
A: As per IAS 102, Share based payments Compensation expense will be recognised each year, over vesting…
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: On January 1, 2019, Nevada Company granted share options to each of the 300 employees working in the…
A: Given that, On January 1, 2019 Nevada Company grants share option to 300 employees of sales…
Q: On January 1, 2020, ABC Company granted to employees a share-based payment with cash and share…
A: Phantom share are not actual shares, therefore the same shall not be included in equity component.
Q: Newmont Corp grants stock options to its top executives. On January 1, 2021, 24 million options were…
A: Equity shares are those shares which do not have preferential right on dividend and repayment of…
Q: On November 1, 2020, Columbo Company adopted a stock-option plan that granted options to key…
A: Journal entry: Journal entry is a set of economic events which can be measured in monetary terms.…
Q: On January 1, 2021, Adams-Meneke Corporation granted 20 million incentive stock options to division…
A: Stock option plans are options to provided to employees to purchase company stock at a future date…
Q: On October 15, 2020, the board of directors of Ensor Materials Corporation approved a share option…
A:
Q: On July 1, 2020, TEGUI-ING Co. issued options to its employees. Information on the options is as…
A: Step 1 Basic earnings per share refers the investors that how much of a firm's net income was…
On January 1, 2020, Green Company had issued executive share options permitting executives to buy 40,000 shares for P25 per share. The vesting schedule is 20% the first year, 30% the second year, and 50% the third year (graded-vesting). Vesting date: December 31, 2020, Amount vesting: 20%, Fair value per option: 10; Vesting date: December 31, 2021, Amount vesting: 30%, Fair value per option: 15; Vesting date: December 31, 2022, Amount vesting: 50%, Fair value per option: 20. Assuming the entity used the
Trending now
This is a popular solution!
Step by step
Solved in 3 steps
- On January 1, 2020, The Red Hot Company established a share option plan for its selected senior employees. A total of 30,000 options were granted that permit said employees to purchase 30,000 shares of P 20 par ordinary share capital at P 35 per share. Options are exercisable beginning on January 1,2023 and can be exercised anytime from January 1,2023 through December 31,2024.At January 1, 2020, the market price for the Red Hot Company share option was P 8, based on an option pricing model used by the entity. All, but 2,000 share options were exercised on December 31,2023.REQUIRED:a) Computation of compensation expense for years 2020, 2021 and 2022.b) Entries as a result of the foregoing for year 2020 through 2023, inclusive.At January 1, 2021, the company had issued 40,000 executive stock options permitting executives to buy 40,000 shares of stock for $25. The vesting schedule is 20% the first year, 30% the second year, and 50% the third year (graded-vesting). The fair value of the options is estimated as follows: Vesting Date Amount Vesting Fair Value per Option Dec. 31, 2021 20 % 2$ Dec. 31, 2022 30 % 2$ 8 Dec. 31, 2023 50 % $ 12 What is the compensation expense related to the options to be recorded in 2021? O $48,000. $96,000. O $128,000. O $184,000.On January 1, 2020, Jade Company granted 100 share options each to 500 employees, conditional upon the employees’ remaining in the entity’s employ during the vesting period. The share options vest at the end of a three-year period. On grant date, each share option has a fair value of P30. The par value per share is P100 and the option price is P120. On December 31, 2021, 30 employees have left and it is expected that on the basis of weighted average probability, a further 30 employees will leave before the of the three-year period. On December 31, 2022, only 20 employees actually left and all of the share options are exercised on such date. How much is the compensation expense that should be recognized for 2022?A . 500,000 B. 880,000 C. 380,000 D. 470,000
- Warren Co. purchased a put option on Echo common shares on January 7, 2020, for $360. The put option is for 400 shares, and the strike price is $85 (which equals the price of an Echo share on the purchase date). The option expires on July 31, 2020. The following data are available with respect to the put option. Date Market Price of Echo Shares Time Value of Put Option March 31, 2020 $80 per share $200 June 30, 2020 82 per share 90 July 6, 2020 77 per share 25 Instructions Prepare the journal entries for Warren Co. for the following dates. a. January 7, 2020—Investment in put option on Echo shares. b. March 31, 2020—Warren prepares financial statements. c. June 30, 2020—Warren prepares financial statements. d. July 6, 2020—Warren settles the put option on the Echo shares.On January 1,2020 , Red Day Company granted 80 share options to each of its 400 employees for the purchase of P 100 par ordinary share at P 140 per share. The fair value of each option on this date was P 22. The employees are required to be in the employ of the company at least until the options vested. The share options will vest as follows: End of 2020, if earnings in 2020 increased of 15% End of 2021, if average annual earnings during 2020 would increase by at least 13%. During 2021, reported earnings increased by 12%. The company reported an increase in 2020 earnings by 13%. At December 31,2020, it was expected that earnings during 2020 would increase by at least 13%. During 2021, reported earnings increased by 12%. No employees left the company during the two year period 2020-2021. All options were exercised during 2022. REQUIRED: a.) All entries during 2020 through 2022. b.) Assume that the reported earnings in 2020 increased by 15%. How much compensation expense would be…On January 1, 2018, Adams-Meneke Corporation granted 25 million incentive stock options to division managers, each permitting holders to purchase one share of the company’s $1 par common shares within the next sixyears, but not before December 31, 2020 (the vesting date). The exercise price is the market price of the shareson the date of grant, currently $10 per share. The fair value of the options, estimated by an appropriate optionpricing model, is $3 per option. Management’s policy is to estimate forfeitures. No forfeitures are anticipated.Ignore taxes.Required:1. Determine the total compensation cost pertaining to the options on January 1, 2018.2. Prepare the appropriate journal entry to record compensation expense on December 31, 2018.3. Unexpected turnover during 2019 caused an estimate of the forfeiture of 6% of the stock options. Determinethe adjusted compensation cost, and prepare the appropriate journal entry(s) on December 31, 2019 and 2020.
- 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, 2022, Mills Corp. purchased a call option on shares of XYZ stock. Terms of the contract were as follows: Number of shares: 100 . Strike price: $120 per share Expiration date: April 30, 2022 Total cost of the option contract paid at signing: $90 .Seller of the option contract: First Investment Bank On January 1, 2022, XYZ stock was trading at $120 per share. The following additional information is known: . On March 31, 2022, the price of XYZ stock was $140 per share. A market appraisal indicated that the time value of the option contract was $70. . On April 5, 2022, the price of XYZ stock was $135 per share. A market appraisal indicated that the time value of the option contract was $60. On this date, Mills settled the option contract. Required: 1. Indicate any amounts that Mills Corp. would have included in its March 2022 quarterly financial statements related to the option contract. ed Complete this question by entering your answers in the tabs below. Req 1 Indicate any…Yellow Company is a calendar-year firm with operations in several countries. At January 1, 2021, the company had issued 40,000 executive stock options permitting executives to buy 40,000 shares of stock for $30. The vesting schedule is 25% the first year, 25% the second year, and 50% the third year (graded-vesting). The fair value of the options is estimated as follows: Vesting Date AmountVesting Fair Valueper Option Dec. 31, 2021 25 % $ 6 Dec. 31, 2022 25 % $ 7 Dec. 31, 2023 50 % $ 9 Assuming Yellow prepares its financial statements in accordance with International Financial Reporting Standards (IFRS), what is the compensation expense related to the options to be recorded in 2022?
- On October 15, 2020, the board of directors of Ensor Materials Corporation approved a share option plan for key executives. On January 1, 2021, 20 million share options were granted, exer- cisable for 20 million shares of Ensor's $1 par ordinary share. The options are exercisable between January 1, 2024, and December 31, 2026, at 80% of the quoted market price on January 1, 2021, which was $15. The fair value of the 20 million options, estimated by an appropriate option pricing model, is $6 per option. Two million options were forfeited when an executive resigned in 2022. All other options were exercised on July 12, 2025, when the share's price jumped unexpectedly to $19 per share. Required: 1. When is Ensor's share option measurement date? 2. Determine the compensation expense for the share option plan in 2021. (Ignore taxes.) 3. What is the effect of forfeiture of the share options on Ensor's financial statements for 2022 and 2023? 4. Is this effect consistent with the general…On January 1, 2018, M Company granted 90,000 stock options to certain executives. The options are exercisable no sooner than December 31, 2020, and expire on January 1, 2024. Each option can be exercised to acquire one share of $1 par common stock for $12. An option-pricing model estimates the fair value of the options to be $5 on the date of grant. If unexpected turnover in 2019 caused the company to estimate that 15% of the options would be forfeited, what amount should M recognize as compensation expense for 2019?Johnstone Co. purchased a put option on Ewing common shares on July 7, 2020, for $240. The put option is for 200 shares, and the strike price is $70. (The market price of a share of Ewing stock on that date is $70.) The option expires on January 31, 2021. The following data are available with respect to the put option. Date Market Price of Ewing Shares Time Value of Put Option September 30, 2020 $77 per share $125 December 31, 2020 75 per share 50 January 31, 2021 78 per share 0 Instructions Prepare the journal entries for Johnstone Co. for the following dates. a. July 7, 2020—Investment in put option on Ewing shares. b. September 30, 2020—Johnstone prepares financial statements. c. December 31, 2020—Johnstone prepares financial statements. d. January 31, 2021—Put option expires.