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72.For a compensatory share option plan, a formal journal entry or entries would be required for…

by Essaynice Tutors | Sep 9, 2023 | accounting

72.For a compensatory share option plan, a formal journal entry or entries would be required for which of the following dates?

	Issuance of Share
	Options on the	Issuance of Stock on
	Grant Date	the Exercise Date
I.	Yes	Yes
II.	Yes	No
III.	No	No
IV.	No	Yes

	a.	I
	b.	II
	c.	III
	d.	IV

Exhibit 15-5

On January 1, 2016, Roberts Company adopts a compensatory share option plan and grants 40 executives 1,000 shares each at $30 a share. The fair value per option is $7 on the grant date. The company estimates that its annual employee turnover rate during the service period of three years will be 4%.

73.Refer to Exhibit 15-5. The journal entry to record compensation expense for 2016 will be (Round your final answer to the nearest whole dollar.)

	a.	Compensation Expense 247,726 Paid-in Capital Share Options 247,726
	b.	Compensation Expense 82,575 Paid-in Capital Share Options 82,575
	c.	Compensation Expense 91,467 Paid-in Capital Share Options 91,467
	d.	Compensation Expense 93,333 Common Stock Option Plan 93,333

74.Refer to Exhibit 15-5. At the end of 2017, the company estimates that the employee turnover will be 5% a year for the entire service period. The compensation expense for 2017 will be (Round your answer to the nearest whole dollar.)

	a.	$77,468
	b.	$80,022
	c.	$82,575
	d.	$160,043

75.Refer to Exhibit 15-5. At the end of 2017, the company estimates that the employee turnover will be 5% a year for the entire service period. At the end of 2018, only 30,000 options vest as only 30 of the 40 executives actually remain. The compensation expense for 2018 will be (Round off turnover calculations to three decimal places and answer to the nearest dollar.)

	a.	$49,957
	b.	$70,000
	c.	$80,022
	d.	$82,575

Exhibit 15-6
On January 1, 2016, 50 executives were given a performance-based share option plan that would award them with a maximum of 300 shares of $10 par common stock for $20 a share. On the grant date, the fair value of an option was $16.50. The number of options that will vest depends on the size of the annual average increase in sales over the next three years according to the following table:

Annual Average Increase in Sales	No. of Shares
Greater than 5%	50
Greater than 10%	150
Greater than 15%	300

On the grant date, the company estimates the annual average sales increase will be 14%.

76.Refer to Exhibit 15-6. The estimated total compensation cost will be

	a.	$55,000.
	b.	$123,750.
	c.	$27,500.
	d.	$247,500.

77.Refer to Exhibit 15-6. In 2017, the company determined that the actual annual average increase was 16%. The compensation expense for 2017 will be

	a.	$123,750
	b.	$247,500
	c.	$82,500
	d.	$55,000

Exhibit 15-7
On January 1, 2016, 70 executives were granted a performance-based share option plan that would award them each a maximum of 300 shares of $5 par common stock for $12 a share based on the increase in sales over the next three years. The fair value per option on the grant date was $16. The award table is as follows:

Increase in Sales	No. of Shares
10%	100
15%	200
20%	300

The company estimates that the sales increase will be 22% and that the annual employee turnover rate will be 2%.

78.Refer to Exhibit 15-7. The compensation expense for 2016 is (to the nearest dollar)

	a.	$82,320.
	b.	$105,414.
	c.	$109,760.
	d.	$210,828.

79.Refer to Exhibit 15-7. In 2017 the actual sales increase was determined to be 18%, and the overall turnover rate was exactly 2%. The compensation expense for 2017 is (to the nearest dollar)

	a.	$210,828.
	b.	$140,552.
	c.	$70,276.
	d.	$35,138.

80.For a stock appreciation rights (SAR) compensation plan, the measurement date is the date

	a.	on which the options (SARs) are granted to the employees.
	b.	when the employees may first exercise the options (SARs).
	c.	on which the options (SARs) are exercised.
	d.	of the adoption of the plan.