On November $2,2024,$ the stockholders of Moore Company voted to adopt a stock options plan for Moore's key officers. Options were granted to officers of Moore as of January $1,2025,$ and at that time the option price was set at $$30.$

According to terms of the option agreement, the officers of the company can purchase $36,000$ shares as of Jan. $1,2028.$ The shares represent compensation for $2025,2026$ and $2027.$ The options lapse on Dec. $31,2028.$

On Febr. $1,2028$ options for $18,000$ shares were exercised. The remaining options lapsed because the executives decided not to exercise. Par value of the stock is $$10.$ The company has adopted the fair value method of expensing its stock options to employees and it has run the Black$-$Scholes option pricing model for these options. The company controller has also updated the pricing model through the date that the options were exercised. The "total" fair value $($i$.$e$.,$ the exercise price has not been deducted yet$)$ for all options per the original run of the model $($and the updated runs$)$ are shown below.

Estimated Total Fair Value of Options$/$per option

Options Fair Value on Grant Date of $1/1/2025$

$$35$

Options Fair Value on $12/31/2025$

$$36$

Options Fair Value on $12/31/2026$

$$38$

Options Fair Value on $12/31/2027$

$$40$

Option exercise date Fair Value on $\frac{2}{1}\frac{?}{2028}$

$$44$

A$.$ What is the Total Lifetime Compensation Expense $($for all years$)$ that the company will record? What would be the individual yearly Compensation Expense amounts?

B$.$ Make any necessary journal entries related to this stock option for $2025-2028.$

$***$

Comments from professor:

For

problern $1$ the correct expenses per year are

$$40,000$

$$80,000$

$$180,000$

$($ $$180,000$

$$240,000$

You do not seem to be including the

servioe year percentage in the table.

For problem $2$ the correct liffetime expense is $$180,000(36,000$$$5)$ and it is $$60,000$ over each of the three services years. This is an option problem and not an

S$.$AR $-$ lifetime expense is only computed on the ghant date.