What is the compensation expense at end of the second year

Assignment Help Financial Accounting

Reference no: EM13755257

On January 1, the company granted 150,000 stock options to key employees. Each option allows an employee to buy one share of $1 par common stock for $25, which was the market price of the shares on the grant date of January 1. In order to be able to exercise the options, the employees must remain with the company for three entire years. It is estimated that the fair value of each option on the date of grant was $4. At the end of three years, all of the options were exercised when the market price of the shares was $38 per share. Assume that the stock-based compensation plan is performance based. As of the end of the first year, the number of options that are probable to vest is 150,000. At the end of the second year, the number of options that are probable to vest is 120,000. The options have a 3-year service period.

What is the compensation expense at the end of the second year?

Reference no: EM13755257

Questions Cloud

Division charge in order to break even : Texas Products Inc. has a division that makes burlap bags for the citrus industry. The division has fixed costs of $10,000 per month, and it expects to sell 42,000 bags per month. If the variable cost per bag is $2.00, what price must the division..

Journalizing issuance of stock-treasury stock transactions : Journalizing issuance of stock and treasury stock transactions

Tools and techniques used to impact web applications : Tools and techniques used to impact web applications. What are some of the motivations behind these attacks

Cost of a fixed asset : Metropolis Country Club purchased a new tractor to be used for golf course maintenance. The tractor cost $64,200. Metropolis borrowed the purchase price from its bank on a 1-year, 7% note payable. Metropolis incurred the following costs:

What is the compensation expense at end of the second year : On January 1, the company granted 150,000 stock options to key employees. Each option allows an employee to buy one share of $1 par common stock for $25, which was the market price of the shares on the grant date of January 1. In order to be able to ..

Types of accounting software : What types of accounting software does your organization use? What are the benefits and limitations of this software? What is XBRL? How does it affect financial reporting?

How the effectivness of the technology overrides : provide an example illustrating how the effectivness of the technology overrides any chance of a conflict with principles of beneficience, autonomy, fidelity, or justice

Entries needed to amortize total pension gains or losses : T. Wells Appeasement Group’s defined benefit pension plan specifies annual retirement benefits according to the following pension formula: 1.3% x service years x final year’s salary Benefits are payable at the end of each year in retirement. Provide ..

Reporting in the financial statements : Which depreciation method does Amazon use for reporting in the financial statements?

User Account

All Pages