Question
Please help with the ones marked incorrect! Identifying and Analyzing Financial Statement Effects of Share-Based Compensation Weaver Industries implements a new share-based compensation plan in
Please help with the ones marked incorrect!
Identifying and Analyzing Financial Statement Effects of Share-Based Compensation Weaver Industries implements a new share-based compensation plan in 2009. Under the plan, the company's CEO and CFO each will receive non-qualified stock options to purchase 100,000, no par shares. The options vest ratably (1/3 of the options each year) over three years, expire in 10 years, and have an exercise (strike) price of $22 per share. Weaver uses the Black-Scholes model to estimate a fair-value per option of $15. The company's tax rate is 40%. (a) Use the financial statement effects template to record the compensation expense related to these options for each year 2009 through 2011. Include the effects of any anticipated deferred tax benefits.
Balance Sheet | ||||||||||
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Transaction | Cash Asset | + | Noncash Assets | = | Liabilities | + | Contributed Capital | + | Earned Capital | |
Compensation expense each year: 2009 through 2011 | Answer | Answer | Answer | Answer | Answer | |||||
Deferred tax benefits each year: 2009 through 2011 | Answer | Answer | Answer | Answer | Answer |
Income Statement | |||||
---|---|---|---|---|---|
Revenue | - | Expenses | = | Net Income | |
Answer | Answer | Answer | |||
Answer | Answer | Answer |
(c) In 2014, the company's stock price is $40 and the CEO exercises all of her options. Use the financial statement effects template to record the exercise.
Balance Sheet | ||||||||||
---|---|---|---|---|---|---|---|---|---|---|
Transaction | Cash Asset | + | Noncash Assets | = | Liabilities | + | Contributed Capital | + | Earned Capital | |
2014 | Answer | Answer | Answer | Answer | Answer |
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