On January 1, 2022, Western Wear, Inc. granted 100,000 stock options to its employees. Of these options,

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On January 1, 2022, Western Wear, Inc. granted 100,000 stock options to its employees. Of these options, 30% will vest on December 31, 2022, 30% will vest on December 31, 2023, and the remaining 40% will vest on December 31, 2024. The fair value of the options was $15.34 per share using a weighted-average expected life. The fair value of the 30,000 options that vest in 2022 is $14.67 per option. The fair value of the 30,000 options that vest in 2023 is $15.38 per option and the fair value of the remaining options is $16.30 per option in 2024. Western records stock-based compensation by adjusting for estimated forfeitures. However, Western does not expect any forfeitures for these options. Prepare a memo to the file addressing Western Wear’s compensation expense for 2022 through 2024. Use the Codification for support.

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Intermediate Accounting

ISBN: 9780136946694

3rd Edition

Authors: Elizabeth A. Gordon, Jana S. Raedy, Alexander J. Sannella

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Question Posted: Jun 25, 2023 05:26 AM

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On January 1, 2022, Western Wear, Inc. granted 100,000 stock options to its employees. Of these options,

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MEMORANDUM TO THE FILE TO Client File Western Wear Inc FROM Student Name DATE Assignment Date RE Accounting for Employee Stock Options with Graded Ves...View the full answer

Intermediate Accounting

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