Wolmore Resources Ltd. is authorized to issue unlimited numbers of common shares, of which 40,500,000 have...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Wolmore Resources Ltd. is authorized to issue unlimited numbers of common shares, of which 40,500,000 have been issued at an average price of $22 per share. On 1 January 20X3, when shares were trading for $30 per share, the company granted stock options to each of its 42 senior executives. The stock options provide that each individual will be eligible to purchase, no earlier than 31 December 20X7, 3,000 common shares at a base option price of $30 per share. The options are nontransferable, vest on 31 December 20X7, and expire on 31 December 20X8. Option pricing models indicate that the options have a total value of $480,000. Estimates of retention are: End of Year Employees expected to remain until vesting Employees expected to forfeit Employees actually forfeiting in the year Employees actually receiving options (42 - 7) 20X3 32 (76%) 10 (24%) 0 20X4 30 (71%) 12 (29%) 5 20X5 35 (83%) 7 (17%) 2 20X6 34 (81%) 8 (19%) 0 20X7 n/a n/a 0 35 Twenty-five individuals who received the options exercised on 31 December 20X7, when the share price was $54. The remaining individuals did not exercise the options. The share price fell to $24 in 20X8, and the remaining options lapsed. Required: 1. Prepare the entries to record the granting of the options, annual expense, exercise, and lapse. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Do not round your intermediate values. Round your final answers to the nearest whole dollar. Use the rounded % in the table except for 20X7. Use the exact calculation in 20X7.) View transaction list Record the entry for annual compensation expense. Record the entry for annual compensation expense. Record the entry for annual compensation expense. 4 Record the entry for annual compensation expense. 5 Record the entry for annual compensation expense. Record the entry for exercising the stock options. Record the entry for lapse the stock options. 1 2 3 6 7 X Credit Wolmore Resources Ltd. is authorized to issue unlimited numbers of common shares, of which 40,500,000 have been issued at an average price of $22 per share. On 1 January 20X3, when shares were trading for $30 per share, the company granted stock options to each of its 42 senior executives. The stock options provide that each individual will be eligible to purchase, no earlier than 31 December 20X7, 3,000 common shares at a base option price of $30 per share. The options are nontransferable, vest on 31 December 20X7, and expire on 31 December 20X8. Option pricing models indicate that the options have a total value of $480,000. Estimates of retention are: End of Year Employees expected to remain until vesting Employees expected to forfeit Employees actually forfeiting in the year Employees actually receiving options (42 - 7) 20X3 32 (76%) 10 (24%) 0 20X4 30 (71%) 12 (29%) 5 20X5 35 (83%) 7 (17%) 2 20X6 34 (81%) 8 (19%) 0 20X7 n/a n/a 0 35 Twenty-five individuals who received the options exercised on 31 December 20X7, when the share price was $54. The remaining individuals did not exercise the options. The share price fell to $24 in 20X8, and the remaining options lapsed. Required: 1. Prepare the entries to record the granting of the options, annual expense, exercise, and lapse. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Do not round your intermediate values. Round your final answers to the nearest whole dollar. Use the rounded % in the table except for 20X7. Use the exact calculation in 20X7.) View transaction list Record the entry for annual compensation expense. Record the entry for annual compensation expense. Record the entry for annual compensation expense. 4 Record the entry for annual compensation expense. 5 Record the entry for annual compensation expense. Record the entry for exercising the stock options. Record the entry for lapse the stock options. 1 2 3 6 7 X Credit
Expert Answer:
Answer rating: 100% (QA)
Journal Entry Date Particulars Debit Amount Credit Amount 20x3 Compensa... View the full answer
Related Book For
Intermediate Accounting
ISBN: 978-0324300987
10th Edition
Authors: Loren A Nikolai, D. Bazley and Jefferson P. Jones
Posted Date:
Students also viewed these accounting questions
-
On January 1, 2013, Sikes Company granted stock options to 100 key employees. Each employee received 300 options. Each option entitles the employee to purchase one share of $1 par value common stock...
-
Massive Corp. is authorized to issue unlimited $0.90 no-par preferred shares and unlimited no-par common shares. There are 12,000 preferred and 36,000 common shares outstanding. In a five-year...
-
The City of Amarillo is authorized to issue $ 5,700,000, 5 percent regular serial bonds in 2017 for the construction of a new exit off the interstate highway within city limits. The bonds mature in...
-
What other types of contingency planning should Matt and Chris include to make the report comprehensive? Please explain the relevance of each suggestion.
-
Santana Rey created Business Solutions on October 1, 2011. The company has been successful, and Santana plans to expand her business. She believes that an additional $86,000 is needed and is...
-
Assume that we make an enhancement to a computer that improves some mode of execution by a factor of 10. Enhanced mode is used 50% of the time, measured as a percentage of the execution time when the...
-
Consider the regression models described in Example 8.4. Example 8.4 a. Graph the response function associated with Eq. (8.10). Equation (8.10) b. Graph the response function associated with Eq....
-
Information related to Banzai Books Ltd. is as follows: balance per books at October 31, $41,847.85; November receipts, $173,528.91; November disbursements, $166,193.54; balance per bank statement at...
-
Q3. Evaluate the determinant of the matrix [1 2 2 23 M = 3 4 333 + 2345 4 4 4 4 4 L5 5 5 5 5555 5- using (a) cofactor expansion and (b) row reduction. In your opinion, which method is more convenient...
-
Peter Daly operates a photo printing centre in Whitehorse. All transactions requiring the payment of cash are recorded in the cash payments journal (page 5). The account balances as of May 1, 2019,...
-
Write a program that predicts the approximate size of a population of organisms. The ap- plication should allow the user to enter the starting number of organisms, the average daily population...
-
A three-phase, 6 pole, 50Hz star connected induction motor delivers useful power 25kW while running at a speed of 950rpm. It is connected to a supply of 400V and takes a current of 60A. Its stator...
-
XYZ Co . produces all the parts it uses to manufacture its products. The following costs per unit were incurred in manufacturing 7 5 , 0 0 0 units of Part B 9 9 : Direct materials $ 3 . 5 0 Direct...
-
Alex Corporation reports the following components of stockholders' equity at December 31 of the prior year. Common stock-$25 par value, 60,000 shares authorized, 38,000 shares issued and outstanding...
-
Jazz Corporation owns 1 0 percent of the Vanderbilt Corporation stock. Vanderbilt distributed a $ 2 4 , 0 0 0 dividend to Jazz Corporation. Jazz Corporation's taxable income ( loss ) before the...
-
Nancy Clancey has a large consulting practice. New clients are required to pay one-half of the consulting fees up front. The balance is paid at the conclusion of the consultation. How does Nancy...
-
Evening Story Corp has sales of $4,301,203. Income tax of $339,211. Expenses of $228,486. depreciation of $345,905. COGS of $2,901,758. Interest of $160,969. Calculate the amount of the firm's gross...
-
During the year land was revalued and the surplus reported as Revaluation surplus; and an asset costing 80,000, written down to 38,000, was sold for 40,000. Identify the cost of any non-current...
-
The income statement information for 2007 and 2008 of the Connor Company (a sole proprietorship) is as follows: Required Fill in the blanks labeled (a) through (g). All the necessary information...
-
The Garrett Company has the following transactions during the months of April and May: The cost of the inventory on April 1 is $5, $4, and $2 per unit, respectively, under the FIFO, average, and LIFO...
-
On January 1, 2007 Crouser Company sold land to Chad Company, accepting a two-year, $150,000 non-interest-bearing note due January 1, 2009. The fair value of the land was $123,966.90 on the date of...
-
Consider the homogeneous bar, of negligible cross section, mass \(M=1.333 \mathrm{~kg}\) and length \(L=60.0 \mathrm{~cm}\) in Fig.12.19 . It is constrained to rotate in a vertical plane about its...
-
A projectile of mass \(m=2.5 \mathrm{~kg}\) is shot tangentially (see Fig.12.19) at the edge of a ring having radius \(R=50 \mathrm{~cm}\) and whose mass is equal (within measurement errors) to that...
-
A homogeneous disk, having mass \(M=2.50 \mathrm{~kg}\) and radius \(R=15.0 \mathrm{~cm}\), can rotate, without friction, about a fixed horizontal axis, passing through the point \(\mathrm{O}\) of...
Study smarter with the SolutionInn App