User Account

All Pages

Prepare journal entry for exercise of option

Assignment Help Financial Accounting
Reference no: EM132493847

The professor answer is this . How did he got those answers? how to calculate exercise of option and expiry of option

20X5

Dr Stock option expense 564,675

Cr Contributed surplus options 564,675

20X6

Dr Stock option expense 201,075

Cr Contributed surplus options 201,075

20X7

Dr Stock option expense 68,250

Cr Contributed surplus options 68,250

question below

Point 1: On January 1, 20X5, Company D (CD), a public company with a December 31 year-end, granted 500 options to each of its 300 senior employees. The company initially estimated that 3 of the employees would leave the company in each of the three years the options are outstanding. The market price at the time the options were granted was $ 35. The exercise price for each option was $ 40. The available options must be exercised by the end of 2018 or they will expire. At the end of 20X5 no employees had left the company. At the end of 20X6 15 employees had left the Company. During 20X7 a further 25 employees left the Company before the end of the year. 90% of all available options were exercised by the end of 20X8.

Point 2: Assume that 50% of the options vest at the end of the first year and 25% vest at the end of each of the second and third year.

Question 1: Prepare the journal entries for the years 20X5 to 20X7

Question 2: Prepare journal entry for exercise of option and expiry of option

Point 3: The fair value of the options is estimated to be approximately $4.70 for options that vest at the end of 20X5, $6.40 for options that vest at the end of 20X6 and $7.80 for options that vest at the end of 20X7.

Reference no: EM132493847

Questions Cloud

Write a user input program using if else statements : Write a user input program using if else statements ONLY name of program "Magic number" the user will try guess the Magic number.
Analyze the alternative compensation schemes : Analyze the alternative compensation schemes discussed in this chapter that private insurers use to pay physicians. Think in terms of how these different.
Compute the effective rate of interest on the loan : Compute the effective rate of interest on the loan, and the cost of not taking the discount. Should Brand take advantage of the cash discount?
Efficient algorithm for converting a fully balanced : Describe an efficient algorithm for converting a fully balanced string of parentheses into an equivalent tree. The tree associated with such a string
Prepare journal entry for exercise of option : Prepare journal entry for exercise of option and expiry of option. Prepare the journal entries for the years 20X5 to 20X7. how to calculate exercise of option
Evaluate the options available to the uk government : Evaluate the options available to the UK government to stimulate the economy. page numbered with appropriate headers and footers.
Measurements on petal and sepal sizes : The iris dataset (in the datasets package) provides measurements on petal and sepal sizes for three species of iris flowers.
Display the time every 5 seconds : Can you please help me to understand the logic behind Writing a script to 1) Display the time every 5 seconds.
How charity can increase income from commercial activities : Advise on how the Charity can increase its income from commercial activities, fundraising events and donations along with examples.

Reviews

Write a Review

Financial Accounting Questions & Answers

  What was the effect of the truck sale on investing cash flow

What was the effect of the truck sale on investing cash flow? (Show cash received from sale and amount of equipment purchased)

  Calculate the par value per share of preferred stock

Calculate the par value per share of preferred stock and determine the preferred stock dividend percentage and calculate the amount that should be shown on the balance sheet for common stock at June 30, 2013.

  Why thornleys require a rate of return of 14 percent

The tax rate is 34 percent. The project will require $18,000 in extra inventory for spare parts and accessories. Should this project be implemented if Thornley

  Preparing a production budget for the second quarter

The company is now in the process of preparing a production budget for the second quarter. Past experience has shown that end-of-month inventory levels must equal 15%

  What were the net costs of product

Suppose that joint -product costs are allocated using the net realizable value method, what were the net costs of product Y?

  You are the newly hired accountant for the gift shop the

you are the newly hired accountant for the gift shop. the owner has just received the december 31 2008 bank statement

  Calculating revenues expenses and incomefill in the blanks

calculating revenues expenses and income.fill in the blanks in the following separate income statements a through e.

  Amount needed to be invested today to return monthly payment

How much would $10,000 invested annually at 8% provide you after 20 years? How much would $5,000 invested quarterly at 6% yield after 10 years? The amount necessary to be invested annually to reach a goal of $10,000 in 5 years assuming a 5% return? T..

  What is the value of the factory

A factory costs $510,000. You forecast that it will produce cash inflows of $155,000 in year 1, $215,000 in year 2, What is the value of the factory?

  Prepare an income statement for each of the five years

On January 1, 2014 Zhao Company purchased equipment for $26,800 that had a $4,000 salvage value and an expected useful life of four years. The equipment was used to produce the following revenues (assume all revenue transactions are for cash). Prepar..

  What is the gross pay and the net pay

What is the gross pay and the net pay for each of the three employees for the current pay period. Assume the normal working hours in a week are 40 hours

  What is the amount of direct materials purchased

The Update Company does not maintain backup documents for its computer files. In June, some of the current data were lost, and you have been asked to help reconstruct the data. The following beginning balances on June 1 are known: What is the amount ..

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd