Homework Answers
Answer:
Given :
Issued common stock of 15000 shares at $ 10 par value.
The fair value of shares are At $ 30 per share.
Cash a/c - Dr 450000
To common stock 150000
(15000 * 10 at par)
To Paid in excess of capital 300000
(15000 * 20 )
(Being shares are issued at $ 30 per shares of market value)
Intrinsic value = Current market price - Strike price
= $ 30 - $ 10.
= $ 20.
The intrinsic value of Option of shares are 15000 * 20 = $ 300000.
The intrinsic value of The option of shares at 31 December 2018 is $ 300000 /- .
Made an assumption that the above solution made as on the options executed as on 31 december 2018.
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