Homework - Ch 19

# Homework - Ch 19 - Exercise 19-4 Requirement 1 \$3 x 4...

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Exercise 19-4 Requirement 1 \$3 fair value per option x 4 million options granted = \$12 million total compensation Requirement 2 no entry Requirement 3 (\$ in millions) Compensation expense (\$12 million ÷ 2 years) . .. 6 Paid-in capital – stock options . .................... 6 Requirement 4 Compensation expense (\$12 million ÷ 2 years) . .. 6 Paid-in capital – stock options . .................... 6

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Exercise 19-5 Requirement 1 At January 1, 2006, the estimated value of the award is: \$3 estimated fair value per option x 25 million options granted = \$75 million total compensation Requirement 2 (\$ in millions) Compensation expense (\$75 million ÷ 3 years) . ........................... 25.0 Paid-in capital – stock options ............................................. 25.0 Requirement 3 Adams-Menke should adjust the cumulative amount of compensation expense recorded to date in the year the estimate changes. 2007 Compensation expense ([\$75 x 94% x 2/3] – \$25) . ................. 22 Paid-in capital –stock options .............................................. 22 2008 Compensation expense ([\$75 x 94% x 3/3] – \$25 – \$22) . ....... 23.5 Paid-in capital –stock options .............................................. 23.5
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## This note was uploaded on 09/27/2008 for the course BUS 1000 taught by Professor Professor during the Spring '08 term at Cal Poly.

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Homework - Ch 19 - Exercise 19-4 Requirement 1 \$3 x 4...

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