Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. on november 1, 2019, sandhill corp. adopted a stoc

On November 1, 2019, Sandhill Corp. adopted a stock option plan that granted options to...

70.2K

Verified Solution

Question

Accounting

On November 1, 2019, Sandhill Corp. adopted a stock option plan that granted options to key executives to purchase 42,400 common shares. The options were granted on January 2, 2020, and were exercisable two years after the date of grant if the grantee was still a company employee; the options expire six years from the date of grant. The option price was set at $46, and total compensation expense was estimated to be $569,000. Note that the calculation did not take forfeitures into account. On April 1, 2021, 3,300 options were terminated when some employees resigned from the company. The fair value of the shares at that date was $31. All of the remaining options were exercised during the year 2022: 29,700 on January 3 when the fair value was $56, and 9,400 on May 1 when the fair value was $62 a share. Assume that the entity follows ASPE and has chosen not to reflect forfeitures in its upfront estimate of compensation expense. (a) Prepare journal entries relating to the stock option plan for the years 2020, 2021, and 2022. Assume that the employees perform services equally in 2020 and 2021, and that the year end is December 31

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students