over a three-ve options for 300, 20) Beach. To 20) On January 1, 2018, Barr Corp. issued stock options for 300,000 shares to a IVO manager which vest pro-rata over a three-year period. The options have an estima fair value of $3 each. To provide additional incentive for managerial achievement the options are not exercisable unless Bart's stock price increases by 6% in me years. Barr initially estimates that it is not able the goal (6% increase in stoc price) will be achieved. How much compensation will Barr Corp record in 2011 A) S54,000 B) 50 C) $300,000 D) $900,000 21) - 21) On January 1, 2018. Day Co granted stock options to key executives exercisable for 500,000 shares of the company's common stock at an exercise price of $8 per share. The stock options yest over the next four years. The market price of the common stock was $8 per share at the date of the grant Day Co estimated the fair value of the options at S4 each. What amount should Day Co record as compensation expenser the year ended December 31, 2018 assuming the company chooses to estimate forfeitures and uses a 5% forfeiture assumption? A) $500,000. D) $950,000 C) $475,000 B) $1,000,000 22) 23) - 22) FX Services granted 15 million restricted common shares to executives. The restricted shares yest over three years. The common shares have a si par value, and had a market price of 58 per share on the grant date. What amount would FX Services record as annual compensation in connection with this grant? A) $40 million B) $3 million C) $120 million D) $15 million 23) On January 1, 2018, Frisbee Co. issued stock options for 300,000 shares of its $1 par common stock to a division manager. The options yet over a three-year period. The options have an estimated fair value of $3 each. To provide additional incentive for managerial achievement, the options are not exercisable unless divisional revenue increases by 6% in three years. Frisbee initially estimates that it is probable the goal (6% revenue increase) will be achieved. How much compensation expense should Frisbee record in 2018? A) $900,000 B) $100,000 C) $300,000 D) None, until the goal is achieved. 24) 24) Pastore Inc. granted options for 1 million shares of its $1 par common stock at the beginning of the current year. The exercise price for the options is $35 per share, which was also the market value of the stock on the grant date. The fair value of the options at the date of grant was estimated at $8 per option. Assuming no forfeitures, what would be the total compensation indicated by these options? A) $35 B) $1 C) $27 D) $8 million million million. million B-5
