8-43 Module 8 1 Equity Recognition and Owner Financing LO3 P8-53. Identifying and Analyzing Financial Statement Effects of Stock-Based Compensation The stockholders' equity of Fowler Company at December 31,2016, follows 7% Preferred stock, $100 par value, 20,000 shares authorized; Common stock, $15 par value, 300,000 shares authorized; Paid-in capital in excess of par value-preferred stock. $ 400,000 . . . 450,000 36,000 360,000 325,000 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 S2 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