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Identifying and Analyzing Financial Statement Effects of Stock-Based Compensation The stockholders equity of...

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Accounting

Identifying and Analyzing Financial Statement Effects of Stock-Based Compensation
The stockholders equity of Aspen Corporation at December 31,2019, follows.
7% Preferred stock, $100 par value, 20,000 shares authorized;
3,600 shares issued and outstanding $360,000
Common stock, $15 par value, 300,000 shares authorized;
27,000 shares issued and outstanding 405,000
Paid-in capital in excess of par valuepreferred stock 32,400
Paid-in capital in excess of par valuecommon stock 324,000
Retained earnings 292,500
Total stockholders equity $1,413,900
The following transactions, among others, occurred during the following year.
Employees exercised 10,800 stock options that were granted in 2015 and had a three-year vesting period. These options had an estimated fair value of $2 at the grant date, and an exercise price of $16. There were no other vested or unvested options after this exercise.
Awarded 900 shares of stock to new executives, when the stock price was $36.
Sold 9,000 shares to employees under the company-wide stock purchase plan. Under the plan, employees purchased the shares at a 10% discount when the stock price was $33 per share.
Granted 36,000 new stock options, with a strike price of $34 and an estimated fair value of $6. The options vest over three years.
Required
Prepare the December 31,2019, statement of stockholders equity assuming that the company reports 2019 pretax income of $434,700 before the effects of stock-based compensation. Assume the company has a 35% tax rate.
ASPEN CORPORATION
Statement of Stockholders Equity
Preferred Stock Common Stock Retained Earnings
Shares
Issued par $100 Paid-in
Capital in
Excess Shares
Issued Par $15 Paid-in
Capital in
Excess
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Stock award Answer 15
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Employee stock purchase Answer 22
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Stock options granted Answer 29
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Net income Answer 36
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