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Stock Options
Prepare the necessary entries from 1/1/10-2/1/12 for the following events using the fair value method. If no entry is needed, write "No Entry Necessary."
1. On 1/1/10, the stockholders adopted a stock option plan for top executives whereby each might receive rights to purchase up to 12,000 shares of common stock at $40 per share. The par value is $10 per share.
2. On 2/1/10, options were granted to each of five executives to purchase 12,000 shares. The options were non-transferable and the executive had to remain an employee of the company to exercise the option. The options expire on 2/1/12. It is assumed that the options were for services performed equally in 2010 and 2011. The Black-Scholes option pricing model determines total compensation expense to be $1,300,000.
3. At 2/1/12, four executives exercised their options. The fifth executive chose not to exercise his options, which therefore were forfeited.
Cayuga Meadows purchased 42,000 shares of common stock of Long Corporation as a long-term investment for $1,000,000. During the year, Long Corporation reported net income of $500,000 and paid dividends of $200,000.
Reporting in the body of the financial statements is required for: A) loss contingencies that are probable and can be reasonably estimated. B) gain contingencies that are probable and can be reasonably estimated.
Prepare the entry to record Poulter's investment in the partnership, assuming the equipment has a fair value of $19,500.
Which of the following requires recognition in the auditor's report as to consistency?
Assuming the market price of the Schieble bonds was known to be $180,000, but the market price of the warrants without the bonds cannot be determined, what are the amounts that should be allocated to the warrants and the bonds?
The Partnership of D, E, and F has the following account balances just prior to the liquidation of the partnership: Cash, $90,000; Noncash Assets, $570,000; Liabilities, $300,000: D, Capital, $120,000; E, Capital, $180,000; and F, Capital, $60,000..
An option-pricing model estimates the fair value for the options to be $5 on the date of grant. What amount should M recognize as compensation expense for 2009?
There're 3 major requirements of Code Section 351: (1) the transfer must consist of property, (2) the transfer must be solely in exchange for stock and (3) the transferors must be in control immediately after the exchange.
Given the probability of the required contingency payment and utilizing a 4% discount rate, the expected present value of the contingency is $5. Compute consolidated buildings at date of acquisition
The job required Nkr 3,800 in direct materials and 30 hours of direct labor time at a total direct labor cost of Nkr 6,649. The job contained only four units. If the company bills at a price 70% above the unit product cost on the job cost sheet, w..
At year-end, only $24,000 of merchandise was still being held by Yarby. What amount of unrealized gain must be deferred by Bowler?
A depreciable asset currently has a $24,500 book value. The company owning the asset uses straight-line depreciation. They paid $37,000 for this asset and consider it to have a $2,000 salvage value with a seven year useful life. How long has the c..
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