On October 1, 2024, lona Barr issued stock options for 300,000 shares to a division manager. The options have an estimated fair value of $3 each. To provide additional incentive for managerial achievement, the options are not exercisable unless Barr's sto ble unless Barr's stock price increases by 6% in three years. Barr under its executive stock option plan, Karim Corporation granted options on January 1, 2024, that permit executives to purchase 15 million of the initially estimates that it is not probable the goal will be achieved. How much compensation will be recorded in each of the next three years? helshares per common shares within the next eight years, but not before December 31, 2026 (the vesting date). The exercise price is the market pr were the date of grant, $18 per share. The fair value of the options, estimated by an appropriate option pricing model, is $4 per option. No forfeitures were anticipated; however, unexpected turnover during 2025 caused the forfeiture of 5% of the stock options. Ignoring taxes, what is the effect on earnings in 2025? Multiple Choice Multiple Choice $300,000 $18.5 million $900,000 $18 million so $19 million $100,000 $20 million On January 1, 2024, Felix Austead Athletic Club (FAAC) granted stock options to key executives exercisable for 503,000 shares of the company's Under its restricted stock unit (RSU) plan, Lin Company granted restricted stock units (RSUs) representing 5 million of it representing 5 million of its $1 par common shares to certain common stock at $18 per share. The stock options are intended as compensation for the next four years. The options are exercisable within a four-year key executives. At vesting, recipients are eive the cash equivalent of the number of shares used to value the RSUs. Lin plans to period beginning January 1, 2028, by the executives still in the employ of the company. No options were terminated during 2024, but the comp account for these new RSUs in the same manner as described in the company's disclosure notes to its financial statements: $18 per share at the date of the grant. FAAC estimated the fair value of the options at $4 each. 1% of the options are forfeited during 2025 due to executive turnover. What amount should FAAC Share-Based Compensation (in part) record as compensation expense for the year ended December 31, 2025, assuming FAAC chooses the option not to estimate forfeitures? re-based compensation cost for RSUs is measured based on the closing fair market varioawardis re r market value of the Company's common stock on the date of grant . The Company reports paid-in capital and recognizes share-based compensation cost over the award's requisite service period on a straight-line basis. Which of the following is an accurate statement regarding the company's policy? Multiple Choice Multiple Choice $1,498,940 O This approach is conceptually correct ith accounting for stock options. $492,940 O The policy is inappropriate be y rather than equity. $1,991,880 O The policy is appropriate as long as Peach periodica award vests . based on the change in the stock's fair value until the $503,000 The policy is appropriate because the recipients have only the option to receive cash; cash settlement is not specified. Under its executive stock option plan, Elbanon Corporation granted options on Ja next eight years butforoptions on January 1, 2024, that permit executives to purchase 15 million of the Stout Incorporated granted options for 1 million shares of its $1 par common stock at the beginning of the current year. The exercise price is $35 per company's 31 par common shares within the next eight years, but not before December 31, 2026 (the vesting date). The exercise price is the market price of the shares on the date of grant, $18 per share. The fair value of the options, e share, which was also the market value of the stock on the grant date. The fair value of the options was estimated at $8 per option. forfeitures value of the options, estimated by an appropriate option pricing model, is $4 per option. No shareholders' equity the options are exercised on April 2, 2027, when the market price is $21 per share. By what amount wi s' equity be increased when the options are exercised? If the options have a vesting period of five years, what would be the balance in "Paid-in Capital-Stock Options" three years after the grant date? Multiple Choice Multiple Choice $330 million A debit of $16.2 million $315 million O A credit of $4.8 million $60 million O A debit of $4.8 million O $270 million A credit of $16.2 million