Solution-Uses the straight-line method to allocate total

Uses the straight-line method to allocate total compensation

Assignment Help Accounting Basics

Reference no: EM131016377

Pastner Brands is a calendar-year firm with operations in several countries. As part of its executive compensation plan, at January 1, 2013 the company issued 400,000 executive stock options permitting executives to buy 400,000 shares of Pastner stock for $34 per share. One-fourth of the options vest in each of the next four years beginning at December 31, 2013 (graded vesting). Pastner elects to separate the total award into four groups (or tranches) according to the year in which they vest and measures the compensation cost for each vesting date as a separate award. The fair value of each tranche is estimated at January 1, 2013, as follows:

Vesting date	Amount vesting	Fair value for option
December 31, 2013	25%	$3.50
December 31, 2014	25%	$4.00
December 31, 2015	25%	$4.50
December 31, 2016	25%	$5.00

Required:1.

1. Determine the compensation expense related to the options to be recorded each year 2013-2016, assuming Pastner allocates the compensation cost for each of the four groups (tranches) separately.

2. Determine the compensation expense related to the options to be recorded each year 2013-2016, assuming Pastner uses the straight-line method to allocate the total compensation cost.

Reference no: EM131016377

Questions Cloud

What are the equivalent units for direct materials : What IS THE TOTAL COST OF UNITS IN ENDING WORK IN PROCESS INVENTORY

Article summary-environmental management for vector control : Please read the following article: http://www.scientificamerican.com/article/how-radiation-threatens-health/. Then, write (one page) Abstract summary "Single lines"

What will the impact be on its operating breakeven point : Parker Investments has EBIT of $20,000, interest expense of $3,000, and preferred dividends of $4,000. If it pays taxes at a rate of 38%, what is Parker's degree of financial leverage (DFL) at a base level of EBIT of $20,000?

Explain the kantian perspective : Explain the Kantian perspective, and explain whether your personal perspective agrees with the utilitarian or Kantian perspective

Uses the straight-line method to allocate total compensation : Determine the compensation expense related to the options to be recorded each year 2013-2016, assuming Pastner uses the straight-line method to allocate the total compensation cost.

What is the definition of public swimming pool : What is the definition of public swimming pool - history of public swimming pool.

Explain what he means by grace and why it is necessary : Using quotations from Thomas Aquinas, explain what he means by grace and why it is necessary

Explain the general terms of a bond contract : Explain the general terms of a bond contract and how bond prices are quoted in the financial press the deadline the night 10 pm

Kanban production cards : How many kanban production cards are needed? How many hours' worth of demand will these cards represent? Suppose the container size is cut in half. Will this make any difference in the inventory levels? Show your work.

User Account

All Pages

Uses the straight-line method to allocate total compensation

Reference no: EM131016377

Reference no: EM131016377

Questions Cloud

Reviews

Write a Review

Accounting Basics Questions & Answers

How much control does fed have over this longer real rate

Coures:- fundamental accounting principles

Accounting problems

Theory of interest - term structure of interest rates

Write a report on internal controls

Prepare the bank reconciliation for company

Cost-benefit analysis

Theory of interest

Liquidity and profitability

What is the expected risk premium on the portfolio

Simple interest and compound interest

Capm and venture capital

Assured A++ Grade

Academics

Major Subjects

Majors

Get In Touch

TERMS & POLICIES

HELP & SUPPORT