Prepare the necessary inputs from 1/1/17 to 2/1/19 for the below events using the fair value method. If no input is needed, write "No input needed."

A. On 1/1/17, shareholders adopted a stock option plan for senior executives whereby each could receive rights to purchase up to 30,000 shares of common stock at $40 per share. The par value is $10 per share.

B. On 2/1/17, options were granted to each of the five executives to purchase 30,000 shares. The options were non-transferable and the executive had to remain an employee of the company to exercise the option. Options expire 1/2/19. The options are assumed to be for services rendered equally in 2017 and 2018. The Black-Scholes option pricing model determines the total compensation expense to be $3,200,000.

C. On 2/1/19, four executives exercised their options. The fifth executive chose not to exercise his options, so he lost them.

Answer rating: 100% (QA)

A On 1117 shareholders adopted a stock option plan for senior executives whereby each could receive rights to purchase up to 30000 shares of common st... View the full answer