Reference no: EM132099335

Question - On January 1, 2016, G Corp. granted stock options to key employees for the purchase of 87,000 shares of the company's common stock at $22 per share. The options are intended to compensate employees for the next two years. The options are exercisable within a four-year period beginning January 1, 2018, by the grantees still in the employ of the company. No options were terminated during 2016, but the company does have an experience of 4% forfeitures over the life of the stock options. The market price of the common stock was $28 per share at the date of the grant. G Corp. used the Binomial pricing model and estimated the fair value of each of the options at $12. What amount should G charge to compensation expense for the year ended December 31, 2016?

$1,002,240.

$522,000.

$1,044,000.

$501,120.