Q2. On January 01, 2021, Alex Company granted restricted stock to five executives. Each executive received...

Question

Question

Q2. On January 01, 2021, Alex Company granted restricted stock to five executives. Each executive received 1,500 shares of Al

business accounting

Add a comment Improve this question Transcribed image text

Answer 1

Answer #1

	Computation of employee stock option expense

	Fair value per share =$10
	Par value per share =$1
	Excess $9
	1500options x 5 executives=7500 options
	Employee compensation exp = 7500*9= 67500
	Vesting period 2years
	Each year 67500/2 = 33750

31-12-2021	Employee compensation exp a/c dr	33750
	To employee stock option outstanding a/c		33750
	(Being compensation expense recognized in respect of 7500 options granted to the employees at $10, amortized 2years)

31-12-2021	Profit & loss account Dr	33750
	To Employee compensation exp a/c		33750


18-02-2022	employee stock option outstanding a/c dr (1500*9)	13500
	To Employee compensation exp a/c		13500
	( Being 1500 options forfeited by one executive

31-12-2022	Employee compensation exp a/c dr	27000
	To employee stock option outstanding a/c		27000
	(Being compensation expense recognized in respect of 7500 options granted to the employees at $10, amortized 2years)

31-12-2022	Profit & loss account Dr	27000
	To Employee compensation exp a/c		27000

01-01-2023	Bank A/c dr	60000
	employee stock option outstanding a/c dr	54000
	To Common stock a/c (6000*1)		6000
	to Security premium a/c		108000

Add a comment

Answer 2

Similar Homework Help Questions

Q2. On January 01, 2021, Alex Company granted restricted stock to five executives. Each executive received...

Q2. On January 01, 2021, Alex Company granted restricted stock to five executives. Each executive received 1,500 shares of Alex common stock. The restricted shares vest on January 01, 2023; thus, the restricted shares are compensation for services rendered during 2021 and 2022. The restricted shares had a grant date value of $75,000 (= $10 fair value per common share x 1,500 shares per executive x 5 executives). On February 18, 2022, one executive forfeited her restricted shares because she...
Q2. On January 01, 2021, Alex Company granted restricted stock to five executives. Each executive received...

Q2. On January 01, 2021, Alex Company granted restricted stock to five executives. Each executive received 1,500 shares of Alex common stock. The restricted shares vest on January 01, 2023; thus, the restricted shares are compensation for services rendered during 2021 and 2022. The restricted shares had a grant date value of $75,000 (= $10 fair value per common share x 1,500 shares per executive x 5 executives). On February 18, 2022, one executive forfeited her restricted shares because she...
Q2. On January 01, 2021, Alex Company granted restricted stock to five executives. Each executive received...

Q2. On January 01, 2021, Alex Company granted restricted stock to five executives. Each executive received 1.500 shares of Alex common stock. The restricted shares vest on January 23; thus, the restricted shares are compensation for services rendered during 2021 and 2022. The restricted shares had a grant date value of share x 1,500 shares per executive x 5 executives). On February 18, 2022, one executive forfeited her restricted shares because she left Alex to join another company's executive team....

On January 1, 2021, Wendy Day Co, granted stock options to key executives exercisable for 519,000...

On January 1, 2021, Wendy Day Co, granted stock options to key executives exercisable for 519,000 shares of the company's common stock at $19 per share. The stock options are intended as compensation for the next five years. The options are exercisable within a four-year period beginning January 1, 2025, by the executives still in the employ of the company. No options were terminated during 2021, but the company anticipates 6% forfeitures over the life of the stock options. The...
Under its executive stock option plan, National Corporation granted 12 million options on January 1, 2021,...

Under its executive stock option plan, National Corporation granted 12 million options on January 1, 2021, that permit executives to purchase 12 million of the company's $1 par common shares within the next six years, but not before December 31, 2023 (the vesting date). The exercise price is the market price of the shares on the date of grant, $20 per share. The fair value of the options, estimated by an appropriate option pricing model, is $2 per option. Suppose...
On January 1, 2021, M Company granted 96,000 stock options to certain executives. The options are...

On January 1, 2021, M Company granted 96,000 stock options to certain executives. The options are exercisable no sooner than December 31, 2023, and expire on January 1, 2027. Each option can be exercised to acquire one share of $1 par common stock for $9. An option-pricing model estimates the fair value of the options to be $3 on the date of grant. What amount should M recognize as compensation expense for 2021? ---- On January 1, 2021, M Company...

As part of its executive compensation plan, Vertovec Inc. granted 90,000 of its no-par common shares...

As part of its executive compensation plan, Vertovec Inc. granted 90,000 of its no-par common shares to executives, subject to forfeiture if employment is terminated within three years. Vertovec’s common shares have a market price of $9 per share on January 1, 2020, the grant date of the restricted stock award, as well as on December 31, 2021. 480,000 shares were outstanding at January 1, 2021. Net income for 2021 was $240,000. Required: Compute Vertovec’s basic and diluted earnings per...
On January 1, 2018, Marguerite DeVille Co. granted restricted stock units (RSUs) representing 300,000 of its...

On January 1, 2018, Marguerite DeVille Co. granted restricted stock units (RSUs) representing 300,000 of its $1 par common shares to executives, subject to forfeiture if employment is terminated within three years. After the recipients of the RSUs satisfy the vesting requirement, the company will distribute the shares. The common shares had a market price of $12 per share on the grant date. At the date of grant, DeVille anticipated that 6% of the recipients would leave the firm prior...
On January 1, 2018, Hugh Morris Comedy Club (HMCC) granted 1.2 million stock options to key executives exercisable for 1...

On January 1, 2018, Hugh Morris Comedy Club (HMCC) granted 1.2 million stock options to key executives exercisable for 1.2 million shares of the company’s common stock at $20 per share. The stock options are intended as compensation for the next three years. The options are exercisable within a four-year period beginning January 1, 2021, by the executives still in the employ of the company. No options were terminated during 2018. The market price of the common stock was $23...

Lance Chips granted restricted stock units (RSUs) representing 40 million of its $1 par common shares to executives, sub...

Lance Chips granted restricted stock units (RSUs) representing 40 million of its $1 par common shares to executives, subject to forfeiture if employment is terminated within four years. After the recipients of the RSUs satisfy the vesting requirement, the company will distribute the shares. The common shares had a market price of $5 per share on the grant date. The total compensation cost pertaining to the restricted stock units is: Multiple Choice $50 million. $5 million. $200 million. $40 million.

Q2. On January 01, 2021, Alex Company granted restricted stock to five executives. Each executive received...

Homework Answers