Question: Please help with the ones marked incorrect! Identifying and Analyzing Financial Statement Effects of Share-Based Compensation Weaver Industries implements a new share-based compensation plan in
Please help with the ones marked incorrect!
Identifying and Analyzing Financial Statement Effects of Share-Based Compensation Weaver Industries implements a new share-based compensation plan in 2009. Under the plan, the company's CEO and CFO each will receive non-qualified stock options to purchase 100,000, no par shares. The options vest ratably (1/3 of the options each year) over three years, expire in 10 years, and have an exercise (strike) price of $22 per share. Weaver uses the Black-Scholes model to estimate a fair-value per option of $15. The company's tax rate is 40%. (a) Use the financial statement effects template to record the compensation expense related to these options for each year 2009 through 2011. Include the effects of any anticipated deferred tax benefits.
| Balance Sheet | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Transaction | Cash Asset | + | Noncash Assets | = | Liabilities | + | Contributed Capital | + | Earned Capital | |
| Compensation expense each year: 2009 through 2011 | Answer | Answer | Answer | Answer | Answer | |||||
| Deferred tax benefits each year: 2009 through 2011 | Answer | Answer | Answer | Answer | Answer | |||||
| Income Statement | |||||
|---|---|---|---|---|---|
| Revenue | - | Expenses | = | Net Income | |
Answer | Answer | Answer | |||
Answer | Answer | Answer | |||
(c) In 2014, the company's stock price is $40 and the CEO exercises all of her options. Use the financial statement effects template to record the exercise.
| Balance Sheet | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Transaction | Cash Asset | + | Noncash Assets | = | Liabilities | + | Contributed Capital | + | Earned Capital | |
| 2014 | Answer | Answer | Answer | Answer | Answer | |||||
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