Question
Analyzing Stock Option Expense for Income Merck & Co., Inc., reported net income attributable to Merck & Co., Inc. of $2,394 million for the 2017
Analyzing Stock Option Expense for Income Merck & Co., Inc., reported net income attributable to Merck & Co., Inc. of $2,394 million for the 2017 fiscal year. Its 2017 10-K report contained the following information regarding its stock options.
Employee stock options are granted to purchase shares of Company stock at the fair market value at the time of grant. These awards generally vest one-third each year over a three-year period, with a contractual term of 7-10 years . . . The weighted average exercise price of options granted in 2017 was $63.88 per option . . . The weighted average fair value of options granted in 2017 was $7.04 per option.
Merck granted 4,232,000 options to employees in 2017.
c. Merck employees exercised 11,512,000 options in 2017, paying a total of $499 million in cash to the company. Using a summary journal entry, show how these option exercises would be recorded in 2017.
Enter answers in millions [$1,000,000 = $1 (million)].
c. Merck employees exercised 11,512,000 options in 2017, paying a total of $499 million in cash to the company. Using a summary journal entry, show how these option exercises would be recorded in 2017. Enter answers in millions [$1,000,000 = $1 (million)]. General Journal Debit Description Credit Cash 0 x Contributed capital 0 0 xStep by Step Solution
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