????????-5????. Identifying and ????naly????ing ????inancial ????tatement ????ffects of ????tock-????ased Compensation The stockholders’ equity of Fowler Company at December 31, 2016, follows.
7% Preferred stock, $100 par value, 20,000 shares authorized;
4,000 shares issued and outstanding. . . . . . . . . . . . . . . . . . . . . . . . . . $ 400,000 Common stock, $15 par value, 300,000 shares authorized;
30,000 shares issued and outstanding. . . . . . . . . . . . . . . . . . . . . . . . . 450,000 Paid-in capital in excess of par value—preferred stock. . . . . . . . . . . . . . 36,000 Paid-in capital in excess of par value—common stock . . . . . . . . . . . . . . 360,000 Retained earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 325,000 Total stockholders’ equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $1,571,000 The following transactions, among others, occurred during the following year.
???? Employees exercised 12,000 stock options that were granted in 2012 and had a three-year vesting period. These options had an estimated fair value of $2 at the grant date, and an exercise price of $16. There were no other vested or unvested options after this exercise.
???? Awarded 1,000 shares of stock to a new executives, when the stock price was $36.
???? Sold 10,000 shares to employees under the company-wide stock purchase plan. Under the plan, employees purchased the shares at a 10% discount when the stock price was $33 per share.
???? Granted 40,000 new stock options, with a strike price of $34 and an estimated fair value of $6. The options vest over three years.
Required Prepare the December 31, 2017, statement of stockholders’ equity assuming that the company reports 2017 pretax income of $483,000 before the effects of stock-based compensation. Assume the company has a 35% tax rate.