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Yanka [14]
3 years ago
13

On June 1, year 2, Oak Corp. granted stock options to certain key employees as additional compensation. The options were for 1,0

00 shares of Oak's $2 par value common stock at an option price of $15 per share. Market price of this stock on June 1, year 2, was $20 per share. The options were exercisable beginning January 2, year 3, and expire on December 31, year 4. On April 1, year 3, when Oak's stock was trading at $21 per share, all the options were exercised. Oak uses the intrinsic method of accounting for stock option plans. What amount of pretax compensation should Oak report in year 2 in connection with the options
Business
1 answer:
Dimas [21]3 years ago
3 0

Answer:

Since the options were granted at an exercise price of $15 when the market value of the shares was $20, total compensation under the intrinsic method would be $5 per share on 1,000 shares or $5,000. Since the options are exercisable on 1/2/X2, the $5,000 in compensation would all be recognized n 20X1.

Explanation:

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weighing the information needed to make rational decisions

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Business analysis

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3 years ago
Burns Corp. had the following items:
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Answer:

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3 years ago
At the end of the year, Sheffield Co. has pretax financial income of $616,000. Included in the $616,000 is $78,400 interest inco
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Answer:

$173,820

Explanation:

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3 0
3 years ago
A certain firm produces and sells staplers. Last year, it produced 7,000 staplers and sold each stapler for $6. In producing the
Crank

Answer:

Economic loss=$(28,000)

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