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Mamont248 [21]
4 years ago
11

On January 1, 2021, Farmer Fabrication issued stock options for 100,000 shares to a division manager. The options have an estima

ted fair value of $6 each. To provide additional incentive for managerial achievement, the options are not exercisable unless divisional revenue increases by 5% in three years. Suppose that after one year, Farmer estimates that it is not probable that divisional revenue will increase by 5% in three years. Required: 1. What is the revised estimate of the total compensation? 2. What action will be taken to account for the options in 2022? 3. What journal entry will be needed to account for the options in 2022?
Business
1 answer:
Black_prince [1.1K]4 years ago
7 0

Answer and Explanation:

The journal entries are shown below:

1. The revised estimated amount of total compensation is

= 100,000 shares × $6

= $600,000

2. The action shows that the Farmer Fabrication cumulative effect for the year 2022 earnings            

3. The journal entries are shown below:

For the year 2022

Compensation expense

         To Paid-in Capital-Stock options $200,000

(Being the compensation expense is recorded) $200,000

For recording this we debited the compensation expense as it increased the expenses and credited the paid in capital as it increased the stockholder equity

The computation is shown below:

= $600,000 ÷ 3 years

= $200,000

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7 0
3 years ago
Over a four-year period, LaKeisha Thompson purchased shares in the Oakmark I Fund. Using the following information, answer the q
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Answer:

LaKeisha Thompson

a. At the end of four years, the total amount invested is:

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b. At the end of four years, the total number of shares purchased is:

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c. At the end of four years, the average cost for each share is:

= $35.97.

Explanation:

a) Data and Calculations:

Investments in Oakmark I Fund:

Year            Investment        Price      Number

                      Amount     per share    of share

Feb 2008        $1,500           $40        37.50

Feb 2009          1,500             30        50

Feb 2010           1,500             34        43.60

Feb 2011            1,500             42        35.71

Total               $6,000                        166.81

Average cost per share = $35.97 ($6,000/166.81)

7 0
3 years ago
1. Which of the following is an economic activity?
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Check this attachment

3 0
4 years ago
Read 2 more answers
July 15 Declared a cash dividend payable to common stockholders of $166,000. August 15 Date of record is August 15 for the cash
Anna35 [415]

While the organization declares the dividend it will create a liability for the employer. legal responsibility is already created whilst the dividend is said on 15 July, therefore there may be no want to file the magazine access again on 15 August.

A cash dividend is the distribution of finances or cash paid to stockholders generally as part of the employer's cutting-edge earnings or amassed profits. cash dividends are paid directly in money, instead of being paid as a stock dividend or a different form of price.

Dividend earnings are described by using the IRS as any distribution of an entity's assets to its shareholders. whilst they are generally cash, dividends can also be in the form of stock or some other property. typically dividend earnings are the distribution of an organization's taxable profits to its investors.

To be eligible for dividends, you need to be preserving the inventory in your Demat account on the report date of the dividend issue. You must have offered the stock at least someday before the ex-date so that the stocks are brought for your Demat account with the aid of the report date.

Learn more about cash dividend here: brainly.com/question/25845157

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2 years ago
Because barcelona is constantly raising the bar, the company experiences high turnover and is constantly hiring. why might scott
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