Green Team Week 6 - E16-11 GIVEN stock options granted to...

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E16-11 GIVEN: 1/1/2010: stock options granted to key employees and officers for the shares of $10 par common stock at $25/share the options are exercisable within a 5-year period beginning 1/1/12, b in employ of the company, expiring 12/31/16 the service period for the award is 2 years fair-value option pricing model determines total compensation expen 4/1/2011: 3,000 options terminated when employees resigned. FMV on this date 3/31/2012: 12,000 options exrcised when market value of common s JEs: Issuance 1/1/2010 no entry Compensation Expense 12/31/2010 Compensation Expense 200,000.00 Paid-in-capital - stock options ($400,000/2 years service period) 12/31/2011 Compensation Expense 170,000.00 Paid-in-capital - stock options ($400,000*1/2*17/20) Termination 4/1/2011 Paid-in-capital - stock options 30,000.00 Compensation Expense (3,000/20,000 = 15%) (200,000 * 15% = 30,000) Exercise 3/31/2012 Cash 300,000.00 Paid-in-capital - stock options 240,000.00 Common stock Paid-in-capital in excess of par (12,000 * 25 = 300,000) (12,000/20,000 = 60%) … (60% * 400,000 = 240,000) (12,000 * 10 = 120,000)
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(300,000 + 240,000 - 120,000 = 420,000)
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he purchase of 20,000 by grantees still nse at $400,000 V of stock was $35/share stock was $40/share 200,000.00 170,000.00 30,000.00 120,000.00 420,000.00
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A.)
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