On January 1, 2020, to motivate top management, Resume Inc. granted 1,000 options to purchase common stock

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On January 1, 2020, to motivate top management, Resume Inc. granted 1,000 options to purchase common stock at \$10 per share to key officers if net income increased by \(5 \%\) in 2020 over the prior year. The fair value of the options on January 1,2020 , is estimated to be \(\$ 5,000\). Resume Inc. reported net income of \(\$ 50,000\) in 2020 , which represented a \(7 \%\) increase over the prior year. How will the options affect the calculation of the company's 2020 diluted earnings per share?

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Intermediate Accounting Volume 2

ISBN: 9781618533135

2nd Edition

Authors: Hanlon, Hodder, Nelson, Roulstone, Dragoo

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