On October 1, 2018, Farmer Fabrication issued stock options for 200,000 shares to a division manager. The options have an estimated fair value of $6 each. To provide additional incentive for managerial achievement, the options are not exercisable unless divisional revenue increases by 2% in four years. Suppose that Farmer initially estimates that it is not probable the goal will be achieved, but then after one year, Farmer estimates that it is probable that divisional revenue will increase by 2% by the end of 2020.1. What is the revised estimate of the total compensation?2. What action will be taken to account for the options in 2019?3. Prepare the journal entries to record compensation expense in 2019 and 2020.
Answers (1)
Know the Answer?
Not Sure About the Answer?
Find an answer to your question 👍 “On October 1, 2018, Farmer Fabrication issued stock options for 200,000 shares to a division manager. The options have an estimated fair ...” 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
Kelly and Jordan are writing a term paper together on the concept of "faithful representation" in the financial statements. Kelly is assigned the task of defining it in the context of an amount being an estimate.
Answers (1)
A shop owner is trying to get ride of items to make sure room for new items so she is offering huge discount. She has discounted an item by 50% to a selling price which is the same as the cost price of the item.
Answers (1)
When Wisconsin Corporation was formed on January 1, the corporate charter provided for 100,000 share of $10 par value common stock.
Answers (1)
which of the following is the biggest and most direct effect of the internet? A. it has drastically improved communication. B. it has led to a doubling of the gross domestic product. C. it has made peoples lives busier and more stressful.
Answers (2)
Sparks Corporation has a cash balance of $10,500 on April 1. The company must maintain a minimum cash balance of $8,500. During April, expected cash receipts are $53,000. Cash disbursements during the month are expected to total $59,500.
Answers (1)
New Questions in Business
This is a type of individual retirement account that is usually not taxed when money is withdrawn from the account
Answers (1)
Last year, Goran had $30,000 to invest. He invested some of it in an account that paid 7% simple interest per year, and he invested the rest in an account that paid 10% simple interest per year.
Answers (1)
A function that indicates the maximum output per unit of time that a firm can produce, for every combination of inputs with a given technology, is called A. a production possibility curve. B. a production function. C. an isocost function. D.
Answers (1)
Guardrails should be installed along all open sides and ends of scaffolding before use. A. False B. True
Answers (1)
A fire destroys all of the merchandise of Coronado Company on February 10, 2017. Presented below is information compiled up to the date of the fire: Inventory, January 1, 2017 $423,300 Sales revenue to February 10, 2017 1,924,500 Purchases to
Answers (1)