On January 1, 2016, Roswall Corporations common stock is selling for $55 per share On this date, Roswall creates a compensatory share option plan for its 60 key employees The plan document states that each employee may purchase 500 shares of its $10 par common stock for $55 per share after working for the company for 3 years On this date, based on an option pricing model, Roswall estimates that each option has a value of $18 Roswall expects that employee turnover rate will be 15 over the service period Because of lower turnover, at the end of 2017, Roswall changes its estimated turnover rate to 12 for the entire service period At the end of 2018, the options vest for 54 employees On January 13, 2019, 10 executives exercise their options when the stock is selling for $75 per share Required 1 Prepare a schedule of Roswalls compensation computations for its compensatory share option plan for 2016 through 2018 2 Prepare Roswalls memorandum entry for the grant date and journal entries for 2016 through 2019 in regard to this plan 3 Show how the account(s) related to the plan is (are) reported in the shareholders equity section of Roswalls balance sheet on December 31, 2017 For 2 There should be two lines of journal entries for each year except 2019 2019 should have 4 lines For the Balance Sheet All i ned is the account name for under the equity section for 2017 CHART OF ACCOUNTS Roswall Corporation General Ledger ASSETS 111 Cash 121 Accounts Receivable 141 Inventory 152 Prepaid Insurance 181 Equipment 198 Accumulated Depreciation LIABILITIES 211 Accounts Payable 231 Salaries Payable 250 Unearned Revenue 261 Income Taxes Payable EQUITY 311 Common Stock 320 Additional Paid in Capital on Common Stock 325 Paid in Capital from Share Options 331 Retained Earnings REVENUE 411 Sales Revenue EXPENSES 500 Cost of Goods Sold 511 Insurance Expense 512 Utilities Expense 521 Salaries Expense 522 Compensation Expense 532 Bad Debt Expense 540 Interest Expense 541 Depreciation Expense 559 Miscellaneous Expenses 910 Income Tax Expense

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On January 1, 2016, Roswall Corporations common stock is selling for $55 per share. On this date, Roswall creates a compensatory share option plan for

On January 1, 2016, Roswall Corporations common stock is selling for $55 per share. On this date, Roswall creates a compensatory share option plan for its 60 key employees. The plan document states that each employee may purchase 500 shares of its $10 par common stock for $55 per share after working for the company for 3 years. On this date, based on an option pricing model, Roswall estimates that each option has a value of $18. Roswall expects that employee turnover rate will be 15% over the service period. Because of lower turnover, at the end of 2017, Roswall changes its estimated turnover rate to 12% for the entire service period. At the end of 2018, the options vest for 54 employees. On January 13, 2019, 10 executives exercise their options when the stock is selling for $75 per share.

Required:

1.	Prepare a schedule of Roswalls compensation computations for its compensatory share option plan for 2016 through 2018.
2.	Prepare Roswalls memorandum entry for the grant date and journal entries for 2016 through 2019 in regard to this plan.
3.	Show how the account(s) related to the plan is (are) reported in the shareholders equity section of Roswalls balance sheet on December 31, 2017.

For 2. There should be two lines of journal entries for each year except 2019. 2019 should have 4 lines.

For the Balance Sheet: All i ned is the account name for under the equity section for 2017.

CHART OF ACCOUNTS

Roswall Corporation

General Ledger

	ASSETS
111	Cash
121	Accounts Receivable
141	Inventory
152	Prepaid Insurance
181	Equipment
198	Accumulated Depreciation

	LIABILITIES
211	Accounts Payable
231	Salaries Payable
250	Unearned Revenue
261	Income Taxes Payable

	EQUITY
311	Common Stock
320	Additional Paid-in Capital on Common Stock
325	Paid-in Capital from Share Options
331	Retained Earnings

	REVENUE
411	Sales Revenue

	EXPENSES
500	Cost of Goods Sold
511	Insurance Expense
512	Utilities Expense
521	Salaries Expense
522	Compensation Expense
532	Bad Debt Expense
540	Interest Expense
541	Depreciation Expense
559	Miscellaneous Expenses
910	Income Tax Expense