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What is the impact on Crane net income for the year

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Question - On December 31, 2020, Crane Company granted some of its executives options to purchase 55000 shares of the company's $10 par common stock at an option price of $50 per share. The options become exercisable on January 1, 2021, and represent compensation for executives' services over a three-year period beginning January 1, 2021. The Black-Scholes option pricing model determines total compensation expense to be $368100. At December 31, 2021, none of the executives had exercised their options. What is the impact on Crane's net income for the year ended December 31, 2021 as a result of this transaction under the fair value method?

a. $0

b. $122700 decrease

c. $368100 decrease

d. $122700 increase

Reference no: EM132736670

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