On July 1, 2010, Ellison Company granted Sam Wine, an employee, an option to buy 400 shares of Ellison Co. stock for $30 per share, the option exercisable for 5 years from date of grant. Using a fair value option pricing model, total compensation expense is determined to be $1,800. Wine exercised his option on October 1, 2010 and sold his 400 shares on December 1, 2010. Quoted market prices of Ellison Co. stock in 2010 were:
July 1 $30 per share
October 1 $36 per share
December 1 $40 per share
The service period is for three years beginning January 1, 2010. As a result of the option granted to Wine, using the fair value method, Ellison should recognize compensation expense on its books in the amount of
a. $1,800.
b. $600.
c. $450.
d. $0.
Answers (1)
Know the Answer?
Not Sure About the Answer?
Find an answer to your question 👍 “On July 1, 2010, Ellison Company granted Sam Wine, an employee, an option to buy 400 shares of Ellison Co. stock for $30 per share, the ...” in 📗 Business if the answers seem to be not correct or there’s no answer. Try a smart search to find answers to similar questions.
Search for Other Answers
You Might be Interested in
How many mcdonald's are there in the world?
Answers (2)
Policymakers are provided data about the private and social benefits of a good being sold in the market.
Answers (1)
Suppose a basket of goods and services has been selected to calculate the CPI and Year 1 has been selected as the base year. In Year 1, the basket's cost was $50; in Year 2, the basket's cost was $52; and in Year 3, the basket's cost was $55.
Answers (1)
Advance, Inc., is trying to determine its cost of debt. The firm has a debt issue outstanding with 16 years to maturity that is quoted at 107 percent of face value. The issue makes semiannual payments and has a coupon rate of 10 percent.
Answers (1)
Jameson and Harrison were both eligible for promotion. However, Patrick, their manager, decided to promote Harrison because he had been with the company for six years and wasa more consistent performer than Jameson.
Answers (1)
New Questions in Business
The market system's answer to the fundamental question "how will the goods and services be produced?" is essentially
Answers (1)
You're trying to determine whether to expand your business by building a new manufacturing plant. The plant has an installation cost of $12.1 million, which will be depreciated straight-line to zero over its four-year life.
Answers (1)
What is the difference is between saving and investing?
Answers (2)
Which of the following is not an example of a cost and its related cost driver? Cost Cost Driver A. Rent Square feet B. Transportation Miles driven C. Direct labor hours Indirect labor D. Utilities Machine hours
Answers (1)
Glass walls a. can be easily broken and with the elimination of those barriers, people can get ahead. b. enable peoples talents and success to be seen by those on the other side. c.
Answers (1)