Question

On January 1, 2015, Western Wear, Inc. granted 100,000 stock options to its employees. 30% of...

On January 1, 2015, Western Wear, Inc. granted 100,000 stock options to its employees. 30% of these options will vest on December 31, 2015, 30% will vest on December 31, 2016, and the remaining 40% will vest on December 31, 2017. The fair value of the options was $15.34 per share using a weighted-average expected life. The fair value of the 30,000 shares that vest in 2015 is $14.67 per share. The fair value of the 30,000 shares that vest in 2016 is $15.38 per share and the fair value of the remaining options is $16.30 per share. Western does not expect any forfeitures.

Prepare a memo to the file addressing Western Wear's compensation expense for 2015 through 2017. Use the Codification for support.

ISSUE: ?

ANALYSIS: ?

Business   Accounting   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

Dividend is a cash payment that is made by the company to the stockholder as a return on his investment.

stock divident also known as script dividend is a dividend which is paid in form of additional shares instead & cash when comapny does not have enough liquid cash.

In case of graded resting, plans is sorted into various groups and then each group is treated as different plan with determined resting period and expected life.

compensation that should be recogised on 1st jan 2015, on the data of grant will be the fair value of shares on the data of granting the options.

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
On January 1, 2017, Bugaboo Corporation granted 40,000 options to key executives. Each option allows the...
On January 1, 2017, Bugaboo Corporation granted 40,000 options to key executives. Each option allows the executive to purchase one share of Bugaboo’s common shares at a price of $30 per share. The options were exercisable within a two-year period beginning January 1, 2019, if the grantee was still employed by the company at the time of the exercise. On the grant date, Bugaboo’s shares were trading at $25 per share, and a fair value options pricing model determined total...
On January 1, 2017, Bugaboo Corporation granted 40,000 options to key executives. Each option allows the...
On January 1, 2017, Bugaboo Corporation granted 40,000 options to key executives. Each option allows the executive to purchase one share of Bugaboo’s common shares at a price of $30 per share. The options were exercisable within a two-year period beginning January 1, 2019, if the grantee was still employed by the company at the time of the exercise. On the grant date, Bugaboo’s shares were trading at $25 per share, and a fair value options pricing model determined total...
On January 1, 2018, Pronghorn Inc. granted stock options to officers and key employees for the...
On January 1, 2018, Pronghorn Inc. granted stock options to officers and key employees for the purchase of 22,000 shares of the company’s $10 par common stock at $26 per share. The options were exercisable within a 5-year period beginning January 1, 2020, by grantees still in the employ of the company, and expiring December 31, 2024. The service period for this award is 2 years. Assume that the fair value option-pricing model determines total compensation expense to be $318,000....
The Burford Corporation provides an executive stock option plan. Under the plan, the company granted options...
The Burford Corporation provides an executive stock option plan. Under the plan, the company granted options on January 1, 2016, that permit executives to acquire 12 million of the company's $1 par value common shares within the next five years, but not before December 31, 2019 (the vesting date). The exercise price is the market price of the shares on the date of the grant, $14 per share. The fair value of the options, estimated by an appropriate model, is...
On January 1, 2021, Adams-Meneke Corporation granted 120 million incentive stock options to division managers, each...
On January 1, 2021, Adams-Meneke Corporation granted 120 million incentive stock options to division managers, each permitting holders to purchase one share of the company’s $1 par common shares within the next six years, but not before December 31, 2023 (the vesting date). The exercise price is the market price of the shares on the date of grant, currently $42 per share. The fair value of the options, estimated by an appropriate option pricing model, is $3 per option. Management’s...
On January 1, 2021, Larkspur Inc. granted stock options to officers and key employees for the...
On January 1, 2021, Larkspur Inc. granted stock options to officers and key employees for the purchase of 21,000 shares of the company’s $10 par common stock at $24 per share. The options were exercisable within a 5-year period beginning January 1, 2023, by grantees still in the employ of the company, and expiring December 31, 2027. The service period for this award is 2 years. Assume that the fair value option-pricing model determines total compensation expense to be $343,000....
CTE granted executive stock options on January 1, 2018, that permit executives to purchase 20 million...
CTE granted executive stock options on January 1, 2018, that permit executives to purchase 20 million of the company’s $1 par common shares within the next 8 years, but not before December 31, 2021 (vesting date). The exercise price is the market price of the shares on the date of grant, which is $11 per share. The Fair value of options, estimated by an appropriate option pricing model, is $4 per option. No forfeitures are anticipated. Half of the options...
Under its executive stock option plan, National Corporation granted 29 million options on January 1, 2021,...
Under its executive stock option plan, National Corporation granted 29 million options on January 1, 2021, that permit executives to purchase 29 million of the company’s $1 par common shares within the next eight years, but not before December 31, 2025 (the vesting date). The exercise price is the market price of the shares on the date of grant, $33 per share. The fair value of the options, estimated by an appropriate option pricing model, is $5 per option. No...
1. Ajax Corporation has granted its top five executives 100,000 stock options each on January 1st....
1. Ajax Corporation has granted its top five executives 100,000 stock options each on January 1st. The strike price of the options is equal to the stock price on the day of the grant. The options vest in two years. At the end of the first year, what should Ajax do to account for these granted stock options? Question 1 options: Record a debit to Compensation Expense equal to one half of the value of the stock options. Record both...
On January 1, 2016, Webber Company granted 77,300 stock options to certain executives. The options are...
On January 1, 2016, Webber Company granted 77,300 stock options to certain executives. The options are exercisable no sooner than December 31, 2018, and expire on January 1, 2022. Each option can be exercised to acquire one share of $3 par common stock for $7. An option-pricing model estimates the fair value of the options to be $3 on the date of grant. If unexpected turnover in 2017 caused the company to estimate that 10% of the options would be...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT