Weaver implements a new share-based compensation plan in 2014. Under the plan, the company's CEO...
80.2K
Verified Solution
Link Copied!
Question
Accounting
Weaver implements a new share-based compensation plan in 2014. Under the plan, the company's CEO and CFO each will receive non-qualified stock options to purchase 100,000 , no par shares. The options vest ratably (1/3 of the options each year) over three years, expire in 10 years, and have an exercise (strike) price of $27 per share. Weaver uses the Black-Scholes model to estimate a fair-value per option of $18. The company's tax rate is 35%.
(Keep in mind that there is a timing difference because compensation expense is recorded on the income statement before it is reported on the tax return).
A. Record journal entries for the compensation expense related to these operations for 2014 through 2016.
B. In 2017, company's stock price ia 24$. If you were Weaver CEO, would you exercise your options? Explain.
C. In 2019, the company's stock price is 46$ and the CEO exercises all of her options. Record journal entries to record the exercise
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!
Other questions asked by students
StudyZin's Question Purchase
1 Answer
$0.99
(Save $1 )
One time Pay
- No Ads
- Answer to 1 Question
- Get free Zin AI - 50 Thousand Words per Month
Unlimited
$4.99*
(Save $5 )
Billed Monthly
- No Ads
- Answers to Unlimited Questions
- Get free Zin AI - 3 Million Words per Month
*First month only
Free
$0
- Get this answer for free!
- Sign up now to unlock the answer instantly
You can see the logs in the Dashboard.