How calculate the total compensation cost. Please give me the breakdown the actual workings so that I understand the answer. For example the answer show the amount of $139,900.95 for 2010. I do not understand how that amount was derived, so what I want is what make up that amount, how was it calculated ? Thanks.

Stock Options Exercise

During June 2009, the Modern Hat Corporation implemented a stock option plan covering key employees. During that month, the company's Board of Directors set aside 25,000 shares of common stock to be used by the plan. On January 1, 2010, Modern Hat Co. granted 10,000 stock options with the right to purchase 10,000 shares of < par value common stock at <2 per share. To be eligible, an employee must remain with the company through December 31, 2012. The employees must exercise their options by December 31, 2015. The following stock prices were observed for Modern Hat on the following dates:

January 1, 2010	$15.00
December 31, 2010	$15.90
December 31, 2011	$14.50
December 31, 2012	$14.70

On the following dates the 10,000 stock options had the following fair values (as determined by the Black-Scholes option pricing method):

January 1, 2010	$33,000
December 31, 2010	$42,000
December 31, 2011	$27,000
December 31, 2012	$30,000
May 12, 2013	$42,000

On May 12, 2013, employees exercised all 10,000 of their stock options.

Complete the following:

• Determine whether these transactions need to be recorded in the company's financial statements.
• Create the journal entries that the company would make with respect to these transactions for each year from 2009 to 2013.
• Describe how the transactions would be reflected in the balance sheet and income statement for the company for each year from 2009 to 2013.