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allsm [11]
3 years ago
8

On July 1, 2010, Ellison Company granted Sam Wine, an employee, an option to buy 400 shares of Ellison Co. stock for $30 per sha

re, the option exercisable for 5 years from date of grant. Using a fair value option pricing model, total compensation expense is determined to be $1,800. Wine exercised his option on October 1, 2010 and sold his 400 shares on December 1, 2010. Quoted market prices of Ellison Co. stock in 2010 were:
July 1 $30 per share
October 1 $36 per share
December 1 $40 per share

The service period is for three years beginning January 1, 2010. As a result of the option granted to Wine, using the fair value method, Ellison should recognize compensation expense on its books in the amount of

a. $1,800.
b. $600.
c. $450.
d. $0.
Business
1 answer:
gregori [183]3 years ago
3 0

Answer:

Ellison Company should recognize compensation expense on its books in the amount of $600

Explanation:

Solution

The transaction in the books of Ellison Company during the period of July 1st 2010 to December 31st 2010

On July 1st the share value was $30 *400 =  12000

On October 1st 2010 sold at $ 36 * 400 =  14400

The gain on this transaction was = $2,400          

31st July 2010, less compensation expenses =$ 1,800    

The fair vale to be recorded as a gain = $ 600

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At the beginning of the project, it may not be possible to estimate the costs for all activities with a level of confidence rega
Marina CMI [18]

Answer: Longer-term project

Explanation:

At the beginning of a project, it may not be possible to estimate the costs for all activities with some levels of confidence regarding their accuracy if the project isn't a short-term project, because it's not really possible to accurately fortell the costs of unforseeable outcomes and factors that may affect the project in one way or the other in the long run.

5 0
3 years ago
At September 1, 2018, Swifty Co. reported stockholders’ equity of $156000. During the month, Swifty generated revenues of $37400
kenny6666 [7]

Answer:

$171,360

Explanation:

Given that,

At September 1, 2018, Swifty Co. reported stockholders’ equity = $156,000

Revenues = $37,400

Expenses = $20,000

Purchased equipment = $4,920

Paid dividends = $2,040

Net income:

= Revenues - Expenses

= $37,400 - $20,000

= $17,400

Stockholders’ equity at September 30, 2018:

= Beginning balance + Net income - Dividend paid

= $156,000 + $17,400 - $2,040

= $171,360

Therefore, the amount of stockholders’ equity at September 30, 2018 is $171,360.

4 0
3 years ago
Sroufe Manufacturing intends to increase capacity by overcoming a bottleneck operation by adding new equipment. Two vendors have
Vaselesa [24]

Answer:

A) Proposal A= 6875 units

B) Proposal B= 6818 units

Explanation:

Giving the following information:

Two vendors have presented proposals.

Proposal A:

Fixed costs= $55000.

Variable cost= $ 14.00.  

Proposal B:

Fixed cost= $75000.

Variable cost= $11.00

The revenue generated by each unit is $ 22.00

Break-even point= fixed costs/contribution margin

A) Proposal A= 55000/(22-14)= 6875 units

B) Proposal B= 75000/(22-11)= 6818 units

3 0
2 years ago
Which decision-making perspective assumes that consumers diligently gather information about purchases, carefully compare variou
Studentka2010 [4]

Answer:

The correct answer is rational decision making perspective.

Explanation:

The "rational model" or "absolute rationality" of decision-making consists of five phases:

  1. Define the objective
  2. Gather information
  3. Identify the possible options
  4. Evaluate alternatives
  5. Experience the effects

However, making a decision is not just an exercise in rationality, an orderly and effective execution of a sequence of actions. In the practice of organizations, taking into account the importance of risks and limitations (resources, time, available information, etc.) within which the decision must be made, it is often not possible or convenient to explore all alternatives and evaluate all the consequences analytically. We can rely on the experience and judgment of the decision makers, who renounce to pursue an optimal solution for a simply satisfactory one. We speak in this case, using an expression created by Herbet Simon, of "limited rationality."

Obviously, in the practice of decision-making processes, there is always the possibility that we should return to an earlier stage or even that the process does not reach the end (that is, choose not to decide). In addition, in an organizational context there are always social actors that guide their actions according to strategies aimed at maintaining or developing their power of decision and influence. Therefore it is questionable that adherence to the rational model is always the best way to make decisions.

5 0
2 years ago
Two of the major advantages of a pass-through entity are that investors can _______ and _______. (choose two correct answers)
prisoha [69]

Two of the major advantages of a pass-through entity are that investors can assume the tax deductions and losses earnings.

An option to lower taxable income is a tax deduction. A standard deduction is a single, predetermined deduction. Higher-income taxpayers frequently have considerable deductible expenses, such as state and local taxes paid, mortgage interest, and charitable contributions, which is why itemized deductions are popular.

Any expense that is deemed "ordinary, necessary, and reasonable" and aids in the revenue generation of a firm is tax deductible. Usually, it is subtracted from the business's income before taxes.

Learn more about tax deduction here

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7 0
1 year ago
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