User Account

All Pages

What amount of compensation expense should smiley recognize

Assignment Help Accounting Basics
Reference no: EM131819780

Question - In order to retain certain key executives, Smiley Corporation granted them incentive stock options on December 31, 2009. 80,000 options were granted at an option price of $35 per share. Market prices of the stock were as follows:

December 31, 2010 $46 per share

December 31, 2011 51 per share

The options were granted as compensation for executives' services to be rendered over a two-year period beginning January 1, 2010. The Black-Scholes option pricing model determines total compensation expense to be $800,000.

Instructions:

1) What amount of compensation expense should Smiley recognize as a result of this plan for the year ended December 31, 2010 under the fair value method?

2) Prepare journal entries relating to the stock option plan for years 2010, 2011, and 2012. Assume that the employee performance services equally in 2010 and 2011.

Reference no: EM131819780

Questions Cloud

What is cash from asset sale-what is profit from asset sale : What is the cash from asset sale and what is the profit from asset sale? Enter inflows as a positive number and outflows as a negative number.
What is the corresponding residual : a. One observation was (25, 70). What is the corresponding residual? b. What is the value of the sample correlation coefficient?
Journalize accrual and payment of employer payroll taxes : Computing and journalizing the payroll expense of an employer Berry Company has monthly salaries of $12,000. Assume Berry pays all the standard payroll taxes.
Prepare heinekens journal entry to record its cash repayment : Prepare Heineken's journal entry to record its cash repayments of its loans and borrowings for 2008. Compute the discount or premium on its loans.
What amount of compensation expense should smiley recognize : What amount of compensation expense should Smiley recognize as a result of this plan for the year ended December 31, 2010 under the fair value method
Journalize the payment of the bonus : Computing bonus payable On December 31, Domino Company estimates that it will pay its employees a 2% bonus on $58,000 of net income after deducting the bonus.
How you would use the pest tool to assist marketers : Explain how you would use the PEST tool to assist marketers in analyzing the external environment in which they are operating.
Statement consistent with the given least-squares line : Is this statement consistent with the given least-squares line? Explain.
What should be the amount of compensation expense : Using the fair value method, what should be the amount of compensation expense recorded by Yang Corporation for these options on December 31, 2010

Reviews

Write a Review

Accounting Basics Questions & Answers

  How much control does fed have over this longer real rate

Hubbard argues that the Fed can control the Fed funds rate, but the interest rate that is important for the economy is a longer-term real rate of interest.   How much control does the Fed have over this longer real rate?

  Coures:- fundamental accounting principles

Coures:- Fundamental Accounting Principles: - Explain the goals and uses of special journals.

  Accounting problems

Accounting problems,  Draw a detailed timeline incorporating the dividends, calculate    the exact Payback Period  b)   the discounted Payback Period. the IRR,  the NPV, the Profitability Index.

  Theory of interest - term structure of interest rates

Term Structure of Interest Rates

  Write a report on internal controls

Write a report on Internal Controls

  Prepare the bank reconciliation for company

Prepare the bank reconciliation for company.

  Cost-benefit analysis

Create a cost-benefit analysis to evaluate the project

  Theory of interest

Theory of Interest: NPV, IRR, Nominal and Real, Amortization, Sinking Fund, TWRR, DWRR

  Liquidity and profitability

Distinguish between liquidity and profitability.

  What is the expected risk premium on the portfolio

Your Corp, Inc. has a corporate tax rate of 35%. Please calculate their after tax cost of debt expressed as a percentage. Your Corp, Inc. has several outstanding bond issues all of which require semiannual interest payments.

  Simple interest and compound interest

Simple Interest, Compound interest, discount rate, force of interest, AV, PV

  Capm and venture capital

CAPM and Venture Capital

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