Question
on June 30th , 2012, Norman Corporation granted compensatory stock options for fifty thousand shares of its $20 par value common stock to certain of
on June 30th , 2012, Norman Corporation granted compensatory stock options for fifty thousand shares of its $20 par value common stock to certain of its key employees. The market price of the common stock on that date was $36 per share and the option price was $30. The black skulls option pricing model determines total compensation expense to be $600,000. The options are exercisable beginning January 1st, 2015, provided those key employees are still in Norman's employee at the time the options are exercised. The options expire on June 30th, 2016. On January 4th, 2015, when the market price of the stock was $42 per share, all 50,000 options were exercised. What should be the amount of compensation expense recorded by Norman Corporation for the calendar year 2014 using the fair value method? Multiple choice a. $600,000 B. $0 C. $240,000 D. $300,000
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