Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. on october 15, 2020, the board of directors of ens

On October 15, 2020, the board of directors of Ensor Materials Corporation approved a stock...

70.2K

Verified Solution

Question

Accounting

On October 15, 2020, the board of directors of Ensor Materials Corporation approved a stock option plan for key executives. On January 1, 2021, 36 million stock options were granted, exercisable for 36 million shares of Ensor's $1 par common stock. The options are exercisable between January 1, 2024, and December 31, 2026, at 90% of the quoted market price on January 1, 2021, which was $10. The fair value of the 36 million options, estimated by an appropriate option pricing model, is $3 per option. Ensor chooses the option to recognize forfeitures only when they occur. Ten percent (3.6 million) of the options were forfeited when an executive resigned in 2022. All other options were exercised on July 12, 2025, when the stocks price jumped unexpectedly to $35 per share. Required: 1. When is Ensors stock option measurement date? 2. Determine the compensation expense for the stock option plan in 2021. (Ignore taxes.) 3. Prepare the journal entries to reflect the effect of forfeiture of the stock options on Ensors financial statements for 2022 and 2023. 5. Prepare the journal entry to account for the exercise of the options in 2025.

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

Finance
1.2K views

One year? ago, your company purchased a machine used in manufacturing for $ 105,000 . You...

Statistics
1.2K views

In the survey of 1500 students for the united states age 18 and under, 1043 were...

Chemistry
1.2K views

In the laboratory you dissolve 18.6 g of potassium carbonate in a volumetric flask and add water...

Statistics
1.2K views

A set has 10 outliers. If every value of this set is increased by 5...

Accounting
1.2K views

Kathy is 60 years of age and self-employed. During 2018, she reported $504,000 of revenues...

Accounting
1.2K views

Oriole Company sells its product for $25 per unit. During 2022, it produced 27500 units...

Accounting
1.2K views

At the time indirect materials are issued to production, the balance in the: ...

Accounting
1.2K views

Assuming variances are separately calculated for each line item listed above, which of the following...

Accounting
1.2K views

What is the Future Value (FV) of $100,000 invested for 20 years with an interest...

Accounting
1.2K views

Which of the following is not good advice to give someone preparing a dashboard of...

Accounting
1.2K views

How is the column for 12/31/2017 Account Balance 6.27%, 11.11%, 80.62% 2. Compute the...

Finance
1.2K views

QUESTION 11 4.55 points Jim's Jelly Company is currently an all-equity firm with 3 million...