:19-2 ons; On January 1, 2016, MEM Corporation granted 75,000 incentive stock options to branch managers, cach permitting holders to purchase one share of the company's $1 par common shares within the next 7 years, but not before December 31, 2020 (the vesting date). The exercise price is the market price of the shares on the date of grant, currently $20 per share. The fair value of the options, estimated by an appropriate option pricing model, is $7 per option. Required: 1. Determine the total compensation cost pertaining to the options on January 1, 2016 2. Prepare the appropriate journal entry to record compensation expense on December 31 2016. 3. Unexpected turnover during 2017 caused the forfeiture of 10% of the stock options. Determine the adjusted compensation cost, and prepare the appropriate journal entry(s) on December 31 2017. The Reserve Company had 606 million shares of common stock outstanding at 2016. The following activities affected common shares during the year. There are no potential 19-3 hares; common shares outstanding nds; 2016 Feb. 27 Purchased 18 million shares of treasury stock. Oct. 30 Sold the treasury shares purchased on February 27 Nov. 29 Issued 72 million new shares. Dec. 31 Net income for 2016 is $1,200 million. 19-6 2017 Declared and issued a 2 for 1 stock split. Net income for 2017 is $1,200 million. Jan. 14 Dec. 31 Required: 1. Determine the 2016 EPS 2. Determine the 2017 EPS 3. At what amount will the 2016 EPS be presented in the 2017 comparative financial statements