Definition Match the term with the appropriate stock option related definition. Term Definition Exercise price: _______ A. Period over...

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Accounting

Definition

Match the term with the appropriate stock option relateddefinition.

Term Definition

Exercise price: _______ A. Period over which employees performservice—time between the grant date and the vesting date

Exercise period: _______ B. Value determined using an optionpricing model

Service period: _______ C. Options where current stock price> exercise price

Fair value amount: _______ D. Options where current stock price< exercise price

Under water options: _______ E. Period employees may exercisetheir options—time between the vesting date and the expirationdate

In the money options: _______ F. Predetermined price to purchasestock at a future date—also known as the strike price

Scenario:

On December 31, 2015, a Company reports the following amounts:Loss from Discontinued Operations, Net of Tax=$90,000; NetIncome=$510,000; Weighted Average Number of SharesOutstanding=150,000 shares. Based on this information, complete thefollowing table reporting per share amounts for Income fromContinuing Operations, Loss from Discontinued Operations, Net ofTax, and Net Income.

Earnings Per SharePer Share Amount
Income from Continuing Operations
Loss from Discontinued Operations, Net of T
Net Income

Answer & Explanation Solved by verified expert
3.8 Ratings (531 Votes)

Exercise price F Predetermined price to purchase stock at a future date—also known as the strike price
Exercise period E Period employees may exercise their options—time between the vesting date and the expiration date
Service period: A Period over which employees perform service—time between the grant date and the vesting date
Fair value amount B Value determined using an option pricing model
Underwater options D Options where current stock price < exercise price
In the money options C Options where current stock price > exercise price

.

.

Earnings Per Share: Amount (A) Weighted Average Number of Shares Outstanding (B) Per Share Amount (A) ÷ (B)
Income from Continuing Operations       [$510,000 + $90,000] $600,000 150,000 $4.00
Loss from Discontinued Operations, Net of Tax -$90,000 150,000 $0.60
Net Income $510,000 150,000 $3.40

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