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Assoli18 [71]
3 years ago
10

On January 1, Year 1, Manning Company granted 97,000 stock options to certain executives. The options are exercisable no sooner

than December 31, Year 3, and expire on January 1, Year 6. Each option can be exercised to acquire one share of $1 par common stock for $8. An option-pricing model estimates the fair value of the options to be $4 on the date of grant. At the time of issuance, no estimate of forfeitures is made. If unexpected turnover in Year 2 caused the company to now estimate that 20% of the options would be forfeited, what amount should Manning recognize as compensation expense for Year 2??Annual Compensation in year 2 =____________.
Business
1 answer:
umka21 [38]3 years ago
4 0

Answer:

$77,600

Explanation:

Total value of compensation expenses:

= No. of options granted × Fair of value options

= 97,000 × $4

= $388,000

Compensation expenses should be recognized per year:

= Total value of compensation expenses ÷ Excercisable time

= $388,000 ÷ 3

= $129,333.33

Expenses recognized in year 1 = $129,333.33

Due to unexpected turnover 20% of the options are forfeited,

Annual compensation = $388,000 × 80%

                                     = $310,400

Annual compensation in year 2:

= Accumulated compensation expenses in year 2 - Expenses recognized in year 1

= [$310,400 × (2/3)] - $129,333.33

= $206,933.33 - $129,333.33

= $77,600

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Javier computer services began operations in July 2017. At the end of the company prepares monthly financial statements. It has
defon

Answer and Explanation:

The adjusting entries are shown below:

a. Salaries expense Dr $1,400

        To Salaries payable $1,400

(being salaries expense is recorded)

b. Interest expense ($40,000 × 12% × 1 ÷12) $400

     To interest payable $400

(being interest expense is recorded)

c. Account receivable Dr $3,000

         To Service revenue $3,000

(being revenue is recorded)

These 3 entries should be recorded

5 0
3 years ago
In Macroland there is $10,000,000 in currency. The public holds half of the currency and banks hold the rest as reserves. If ban
kipiarov [429]

Answer:

$50,000,000; $55,000,000

Explanation:

In Macroland there is $10,000,000 in currency. The public holds half of the currency and banks hold the rest as reserves. If banks' desired reserve/deposit ratio is 10%, deposits in Macroland equal <u>$50,000,000 </u> and the money supply equals <u>$55,000,000</u>

3 0
2 years ago
How do businesses and the society benefit from marketing?
Verdich [7]

Answer:

Marketing stimulates a competitive economy, promotes products and services, and targets consumers who are most likely to become purchasers. Higher sales for a company that employs effective marketing strategies translate into expansion, job creation, higher government tax revenue, and eventually, overall growth.

HAVE A GOOD DAY!

5 0
3 years ago
Jeff, a local traffic​ engineer, has designed a new pedestrian foot bridge that is capable of handling the current traffic rate
Delicious77 [7]

Answer:

a. How long will the current bridge system work before a new bracing system is​ required?: 64.18 years or 64 years and 2 months.

b. What if the annual traffic rate increases at 8 ​% ​annually: The bracing system will last for 24.65 years or 24 years and 7 months.

c. At what traffic increase rate will the current system last only 12 ​years: 17.13%

Explanation:

a. Denote x is the time taken for the number of pedestrian to grow from 300 to 2000. The current pedestrian is 300, the grow rate per year is 3% or 1.03 times a year. Thus, to reach 2,000, we have the equation: 300 x 1.03^x = 2000. Show the equate, we have 1.03^x = 6.67 <=> x = 64.18

b.  Denote x is the time taken for the number of pedestrian to grow from 300 to 2000. The current pedestrian is 300, the grow rate per year is 8% or 1.08 times a year. Thus, to reach 2,000, we have the equation: 300 x 1.08^x = 2000. Show the equate, we have 1.08^x = 6.67 <=> x = 24.65.

c. Denote x as traffic increase rate. The current pedestrian is 300, the grow rate per year is (1+x) times a year. Thus, to reach 2,000 after 12 years and thus a new bracing system to be in place, we have the equation: 300 x (1+x)^12 = 2000. Show the equate, we have (1+x)^12 = 6.67 <=> 1+x = 1.1713 <=> x = 17.13%.

8 0
3 years ago
if a person is highly risk averse, the marginal utility associated with a negative outcome outweighs the marginal utility from a
Ratling [72]

If a person is highly risk averse, the higher marginal utility associated with a negative outcome outweighs the lower marginal utility from a positive outcome.

<h3>What is marginal utility?</h3>

The extra satisfaction which a consumer receives from possessing one more unit of an item or service is known as marginal utility.

The concept of marginal utility is helps in describing how customers make decisions to get the most out of their limited budgets. In general, until the marginal utility exceeds the marginal cost, consumers will keep buying more of a good.

There are three types of Marginal utility:

  1. Positive Marginal Utility: When having more of something provides you more happiness, you have positive marginal utility. Assume you regularly eat a piece of cake, however a second piece would bring you even more joy. Then the marginal utility from cake consumption is positive.
  2. Zero Marginal Utility:  It occurs when using more of an item provides no additional measure of satisfaction. For instance, you might feel reasonably full after 2 pieces of cake but not significantly better after a third slice. Your marginal utility on eating cake is 0 in this situation.
  3. Negative Marginal Utility: It occurs when you have an abundance of an item, and ingesting more is really hazardous. After eating three slices of cake, the fourth piece of cake may potentially make you sick.

To know more about Marginal utility, check out:

brainly.com/question/15050855

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6 0
11 months ago
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