Identifying and Analyzing Financial Statement Effects of Share-Based Compensation Weaver Industries implements a new share-based compensation plan in 2014. Under the plan, the company's CEO and CFO each will receive non-qualified stock options to purchase 100,000, no par shares. The options vest ratably (1/3 of the options each year) over three years, expire in 10 years and have an exercise (strike) price of $27 per share. Weaver uses the Black-Scholes model to estimate a fair-value per option of $18. (a) Use the financial statement effects template to record the compensation expense related to these options for each year 2014 through 2016.

Use negative signs with answers, when appropriate.

	Balance Sheet
Transaction	Cash Asset	+	Noncash Assets	=	Liabilities	+	Contributed Capital	+	Earned Capital
Compensation expense recorded each year	Answer		Answer		Answer		Answer		Answer

Income Statement
Revenue	-	Expenses	=	Net Income
Answer		Answer		Answer

(b) In 2017, the company's stock price is $24. If you were the Weaver Industries CEO, would you exercise your options? Explain.