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On October 1, 2018, Farmer Fabrication issued stock options for 420,000 shares to a division manager. The options have an estimated fair value of $9
On October 1, 2018, Farmer Fabrication issued stock options for 420,000 shares to a division manager. The options have an estimated fair value of $9 each. To provide additional incentive for managerial achievement, the options are not exercisable unless divisional revenue increases by 5% in five years. Suppose that Farmer initially estimates that it is not probable the goal will be achieved, but then after one year, Farmer estimates that it is probable that divisional revenue will increase by 5% by the end of 2020. bints Required: Skipped 1. What is the revised estimate of the total compensation? 2. What action will be taken to account for the options in 2019? 3. Prepare the journal entries to record compensation expense in 2019 and 2020. eBook Complete this question by entering your answers in the tabs below. Print Req 1 and 2 Req3 References What is the revised estimate of the total compensation and what action will be taken to account for the options in 2019? 1. Estimate total compensation 2. What action will be taken to account for the options in 2019? Reg 1 and 2 Req3 > 1. What is the revised estimate of the total compensation? 2. What action will be taken to account for the options in 2019? 3. Prepare the journal entries to record compensation expense in 2019 and 2020. Complete this question by entering your answers in the tabs below. Dints Skipped Req 1 and 2 Req3 Prepare the journal entries to record compensation expense in 2019 and 2020. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) eBook View transaction list Print Journal entry worksheet References
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