On January 1, 2021, Adams-Meneke Corporation granted 60 million incentive stock options to division managers, each permitting holders to purchase one share of the companys $1 par common shares within the next six years, but not before December 31, 2023 (the vesting date). The exercise price is the market price of the shares on the date of grant, currently $38 per share. The fair value of the options, estimated by an appropriate option pricing model, is $6 per option. Managements policy is to estimate forfeitures. No forfeitures are anticipated. Ignore taxes. Required:

1. Determine the total compensation cost pertaining to the options on January 1, 2021. 2. Prepare the appropriate journal entry to record compensation expense on December 31, 2021. 3. Unexpected turnover during 2022 caused an estimate of the forfeiture of 5% of the stock options. Prepare the appropriate journal entry(s) on December 31, 2022 and 2023 in response to the new estimate.

Walters Audio Visual Inc. offers an incentive stock option plan to its regional managers. On January 1, 2021, options were granted for 68 million $1 par common shares. The exercise price is the market price on the grant date$7 per share. Options cannot be exercised prior to January 1, 2023, and expire December 31, 2027. The fair value of the 68 million options, estimated by an appropriate option pricing model, is $1 per option. Required:

1. Determine the total compensation cost pertaining to the incentive stock option plan. 2. to 5. Prepare the appropriate journal entries to record compensation expense on December 31, 2021 and 2022. Prepare the appropriate journal entry to record the exercise of 75% of the options on March 12, 2023, when the market price is $8 per share and the entry on December 31, 2027, when the remaining options that have vested expire without being exercised.

For the year ended December 31, 2021, Norstar Industries reported net income of $915,000. At January 1, 2021, the company had 760,000 common shares outstanding. The following changes in the number of shares occurred during 2021:

Apr.		30		Sold 35,000 shares in a public offering.
May		24		Declared and distributed a 5% stock dividend.
June		1		Issued 30,000 shares as part of the consideration for the purchase of assets from a subsidiary.

Required:

Compute Norstar's earnings per share for the year ended December 31, 2021. (Enter your answers in thousands. Round "EPS" answer to 2 decimal places. Do not round intermediate calculations.)