Evaluate the total compensation cost pertaining to options

Assignment Help HR Management
Reference no: EM1340845

Share-based compensation

The Buford Corporation provides an executive stock option plan. Under the plan, the company granted options on January 1, 2006, that permit executives to acquire 12 million of the company's $1 par value common shares within the next five years, but not before December 31, 2009 (the vesting date). The exercise price is the market price of the shares on the date of the grant, $14 per share. The fair value of the options, estimated by an appropriate model, is $3 per option. No forfeitures are anticipated. Ignore taxes.

(a) Determine the total compensation cost pertaining to the options, assuming Buford chooses to follow the FASB's accounting approach for fixed compensation plans. Show calculations.
(b) Prepare the appropriate journal entry (if any) to record the award of options on January 1, 2006.
(c) Prepare the appropriate journal entry (if any) to record compensation expense on December 31, 2006.

Reference no: EM1340845

Questions Cloud

How do organizations establish appropriate objectives : How do organizations establish appropriate objectives for their compensation systems and How do changes in corporate strategy affect the objectives of the compensation systems
Design a compensation package and incentive : Design a Compensation Package and Incentive and Benefits Plan - James Richards has an electrical engineering degree from a United States' accredited university. Upon graduation he was offered
Compensation and benefits explained in solution : Choose a group leader and discuss and come to a consensus on the following points, and on the format and theme of your presentation:The type of job analysis you will conduct and why you believe that approach is best.
Determine the appropriateness of retirement planning program : Determine the appropriateness of major retirement planning programs, such as social security, IRAs, and 401Ks for different situations.
Evaluate the total compensation cost pertaining to options : Evaluate the total compensation cost pertaining to the options, assuming Buford chooses to follow the FASB's accounting approach for fixed compensation plans. Show calculations.
How well do identified organizations represent your interest : Prepare a table with two columns. In the first column, list individual interests that are affected by public policy decisions made by local, state, and federal government.
Explain what are the income tax and fica tax : Explain What are the income tax and FICA tax consequences to Mr. Bern if the IRS determines that $100,000 of his salary is unreasonable compensation?
Ethical issues inherent in compensation systems : Show the ethical issues inherent in compensation systems, paying particular attention to the way in which ethics are involved in determining and administering compensation system.
Evaluate the reward systems : Please Assist in a five slide PPT with documentation for each slide with a recommendation for administering and evaluating reward systems

Reviews

Write a Review

HR Management Questions & Answers

  Improve problem solving capabilities within organization

Types of teams as to their effectiveness that will improve problem solving capabilities within organizations.

  Influence tactics help in reducing organizations politics

Explain the different types of influence tactics that will be of a help “if adopted” in reducing the organizational politics.

  Report on citigroup''s hr service level agreement

Human Resources or Human Resource Management deals with HR Service Level Agreement. HR Service Level Agreement is an agreement made between the employer and the employee, which states that the employee would work under any client and sometimes any ti..

  A project report on hrm

Human Resource Management as the name suggests, it is a management discipline which deals with the human i.e. the workforce aspect of organizations. Need and practices of HRM are inevitable in present scenario of extreme competition where "Talent War..

  Hrp: recruitment and selection

Recruitment and Selection is the initial ladder of any Human Resource Planning process and contains an immense significance for any organisation.

  A project report on study of statutory complainces

Statutory compliance and its immense knowledge are crucial to be understood in an organization. It contains all the forms, procedures and acts applicable in a company.

  Operant conditioning and Reinforcement

Operant conditioning is a learning process where behaviour is controlled by its consequences. In this process an individual's behaviour can be modified through the use of positive or negative reinforcement.

  Effectiveness of training programs in achieving customers an

The main motive for conducting this research is to provide broad range of research of the literature and their reviews related to training and development and assisting the employees in providing customers satisfaction.

  A critical analysis of hr processes and practices in fedex c

FedEx is illustrious for its novel HR processes and practices that have greatly accounted for its success.

  Integrating culture and diversity in decision making

People in the organization are known as Google where they share common goals and have common vision.

  Impact of employee attrition on people management in organis

Talent management implies recognizing a person's inherent skills, traits, personality and offering him a matching job.

  Labour dissonance at maruti suzuki india limited: a case stu

This Case Study focuses on various issues related to Labour Unrest at Maruti Suzuki India Limited.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd