Determining compensation expense

Assignment Help Accounting Basics
Reference no: EM13140938

On January 1, 2009, D Corp. granted an employee an option to purchase 6,000 shares of D's $5 par common stock at $20 per share. The options became exercisable on December 31, 2010, after the employee completed two years of service. The option was exercised on January 10, 2011. The market prices of D's stock were as follows: January 1, 2009, $30; December 31, 2010, $50; and January 10, 2011, $45. An option pricing model estimated the value of the options at $8 each on the grant date. For 2009, D should recognize compensation expense of:

A. $ 0.

B. $24,000.

C. $30,000.

D. $90,000.

Reference no: EM13140938

Questions Cloud

As a beginning business analyst : As a beginning business analyst, you have been tasked by the project manager to develop the system requirements related to the handling of outstanding purchase orders.
Compute the mirr : Compute the MIRR we need a finance rate and an reinvestment rate and finance and a reinvestment rate are needed to compute the return on invested capital (RIC) for non-simple cash flows.
How would grit on the filter paper affect your confidence : During membrane filter method, for testing fecal contamination in drinking water how would grit on the filter paper affect your confidence in your data results? How should the method for determining coliform density be altered?
Shares currently in the hands of investors : Which of the following represents the shares currently in the hands of investors?
Determining compensation expense : On January 1, 2009, D Corp. granted an employee an option to purchase 6,000 shares of D's $5 par common stock at $20 per share.
Determine the activation energy for this reaction" : A reaction is followed and found to have a rate constant of 3.36 x 10^4 M-1S-1 at 344 K and a rate constant of 7.69 M-1s-1 at 219K. Determine the activation energy for this reaction"
What is the organization total revenue : If the interest rate that the firm must pay to borrow capital is 25%, then if the firm borrows the optimal amount of capital, what is the organization's total revenue?
Complete the animal phylogenetic tree : Complete the animal phylogenetic tree, choose 2 animal phyla and discuss how closely related they are based on characteristics in the tree.
Computing net cash provided or used by operating activities : A company's income statement showed the following: net income, $124,000; depreciation expense, $30,000; and gain on sale of plant assets, $14,000. Calculate the net cash provided or used by operating activities

Reviews

Write a Review

Accounting Basics Questions & Answers

  Comparative income statement for fiscal years

Prepare a comparative income statement for fiscal years 2003 and 2004 in vertical form, starting each item as a percent of revenues. Round to one decimal place.

  Compute the target cost of a cd player

Required:  Compute the target cost of a CD player. Loyola International, Inc. is considering adding a portable CD player to its product line. Management believes that in order to be competitive,

  Distribution and taxed as a dividend

Last year, Loon sold an appreciated asset for $600,000 (basis of $200,000). Payment for one half of the sale of the asset was made this year. How much of Wendy's distribution will be taxed as a dividend?

  Computing the proper earnings

During the year 2010, the corporation earned $600,000 after deducting all expenses. The tax rate was 30%. Compute the proper earnings per share for 2010.

  Ship goods and their implication on the business

Determine and analyze other methods to decide when to ship goods and their implication on the business.

  Catherine bases in the land and inventory

Catherine's basis was $50,000 in the CAR Partnership interest just before she received a proportionate nonliquidating distribution consisting of land held for investment (basis of $40,000, fair market value of $60,000) and inventory (basis of $40,..

  Annual reporting periods

What were the company's two largest current liabilities at the end of its 2 most recent annual reporting periods?

  What is the firms dividend growth rate

The common stock of EBM Corporation is $100 per share. The expected dividend on its stock in the current period is $5, and the firm's cost of common stock is 12%. What is the firm's dividend growth rate (assume that the growth rate is constant)?

  Determining statistical safety stock

If the standard deviation of demand is six per week, demand is 50 per week, and the desired service level is 95%, approximately what is the statistical safety stock?

  Determine the total compensation cost pertaining

1.Determine the total compensation cost pertaining to the options. 2.Prepare the appropriate journal entry(if any)to record the award of options on January 1,2009.

  What is dell strategy for success in the marketplace

what is Dell's strategy for success in the marketplace? Does the company rely primarily on a customer intimacy, operational excellence, or product leadership customer value.

  What effect do subsidiary treasury stock holdings

What are the advantages of acquiring the majority of the voting shares of another company rather than acquiring all of its voting stock?

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