16-3, and 16-4

AICPA adapted ber 30, 2016, that provided fficers of the corporation at a P16-3 (L03) EXCEL (Stock-Option Plan) Berg Company adopted a stock option plan on November 30, 2016. the that 70,000 shares of $5 par value stock be designated as available for the granting of options to officers of the en price of $9 a share. The market price was $12 a share on November 30, 2017 On January 2, 2017, options to purchase 28,000 shares were granted to president Tom Winter--15,000 for service dered in 2017 and 13.000 for services to be rendered in 2018. Also on that date, options to purchase 14,000 shares were vice president Michelle Bennett-7,000 for services to be rendered in 2017 and 7,000 for services to be rendered in 2018 ket price of the stock was $14 a share on January 2, 2017. The options were exercisable for a period of one year followine the in which the services were rendered. The fair value of the options on the grant date was 54 per option In 2018, neither the president nor the vice president exercised their options because the market price of the stock wash the exercise price. The market price of the stock was $8 a share on December 31, 2018, when the options for 2017 services and On December 31, 2019, both president Winter and vice president Bennett exercised their options for 13,000 and 7.000 schon respectively, when the market price was $16 a share. Instructions Inst Fort Prepare the necessary journal entries in 2016 when the stock option plan was adopted, in 2017 when options were granted, in 2018 when options lapsed, and in 2019 when options were exercised. P16.4 (L03) (Stock-Based Compensation) Assume that Amazon.com has a stock option plan for top management a stock option represents the right to purchase a share of Amazon $1 par value common stock in the future at a price equal fair value of the stock at the date of the grant. Amazon has 5000 stock options outstanding, which were granted at the beginning of 2017. The following data relate to the option grant. Exercise price for options Market price at grant date January 1, 2017) Fair value of options at grant date (January 1, 2017) Service period $40 S40 $6 5 years P16. the an fiscal $2,500 only P compa: Th 20,000 had not un options, 200 shares of restricted eat the requirements Instructions (a) Prepare the journal entry(ies) for the first year of the stock option plan. b) Prepare the journal entry(ies) for the first year of the plan assuming that, rather than options, 700 stock were granted at the beginning of 2017. Now assume that the market price of Amazon stock on the grant date was $45 per share. Repeat the new (a) and (b). (d) Amazon would like to implement an employee stock-purchase plan for rank-and-file employees, avold recording expense related to this plan. Which of the following provisions must be in place recording compensation expense? (1) Substantially all employees may participate. (2) The discount from market is small (less than 5%). 0) The plan offers no substantive option feature. (4) There is no preferred stock outstanding On 20% stod ditional during Instruct ployees, but it would like place for the plan to (b) ES