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balu736 [363]
3 years ago
15

On January 1, 2018, Olympic Insurance Company granted 30,000 stock options to certain executives. The options are exercisable no

sooner than December 31, 2020, and expire on January 1, 2021. Each option can be exercised to acquire one share of $1 par common stock for $12. An option- pricing model estimates the fair value of the options to be $5 on the date of grant. The market price of Olympic's stock was as follows: January 1, 2018 December 31, 2018 What amount should Olympic recognize as compensation expense for 2018?a) $10,000
b) $20,000

c) $30,000

d) $50,000
Business
1 answer:
Artyom0805 [142]3 years ago
4 0

Answer:

Option D. $50,000.    

Explanation:

We can solve it by two methods:

Method 1: Conceptually

The 30,000 stock options has vested period of 3 years, which means 10,000 stock options a year. Furthermore, according to accrual concept application in the employee benefits international standard on accounting, the increase in liability for compensating other party for its services is increase in expense. Here, increase in expense is the option fair value which is $5. So the Compensation expense is:

Compensation expense = $5 per stock option * 10,000 Stock Options per year

= $50,000 for the first year 2018

Method 2: Formula Method

As we know that:

Compensation expense for 2018 = Total compensation / Vested period

Here

Total compensation = $5 stock option * 30,000 options

Vested period is 3 years

By putting values, we have:

Compensation expense = (30,000 × $5)/3 years

Compensation expense = $50,000

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A factory worker earns $500 per week and will receive a $2,000 bonus at year-end, a 2-week paid vacation, and 5 paid holidays. T
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Answer:

$70

Explanation:

Data provided in the question:

Earnings per week = $500

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Paid holidays = 5

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Since  the workers have 2 weeks of vacation the fringe benefit will be calculated for 50 weeks  

[as 1 year have 52 weeks, so  52 - 2 weeks = 50 weeks]

Now,

Bonus per week = $2,000 ÷ 50 weeks

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since there are 5 days working in a week

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= $100 per day

Thus,

Total holiday pay for a year =  Holiday pay per day × total holidays per year

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Holiday pay per week = $500 ÷ 50 weeks

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<em>Underestimating</em> your <em>income</em> is a conservative and healthy measure, such as it is overestimating your expenses.

Specially when your income is variable iit can be hard to predict. You will be safer both if your income lowers or your unpredictable expenses increase.

There are many unpredictable situations that could put you in a difficult situation: a disease, a natural disaster, the need to help a family member or friend in trouble. If any of these unfortunate circumstances arises and your budget is too tight, you could see yourself in financial trouble.

But, if you if all is smooth you will have in a happy situation, you will have a surplus which can use for savings, for an important purchase, or for vacations.

It is better to be cautious than to regret later!

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Answer:

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(Last Word) According to Yale University's Environmental Performance Index (EPI), A) growth in GDP per person initially improves
tatiyna

Answer:

B) countries with higher GDP per person tend to have healthier environments.

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According to the 2020 Environmental Performance Index (EPI) elaborated by Yale and Columbia universities, a strong positive correlation exists between high GDP per capita and healthier environments. There are a few exceptions to this correlation, in Asian (especially Arab) countries where GDP per capita might be high, but the vast majority of income is received by a vary small number of people. But in the rest of the world, a high GDP per capita generally results in healthier environments.

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