Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Problem 3 (6 Marks) Stardust Inc. follows IFRS and has a year end of December 31. On November 1, 2020, the company adopted a
Problem 3 (6 Marks) Stardust Inc. follows IFRS and has a year end of December 31. On November 1, 2020, the company adopted a stock option plan that granted options to top executives. Each executive could receive rights to purchase 3,000 shares. On January 1, 2021, the options were granted to five executives. The option price was set at $40 per share and the total compensation package was estimated to be worth $390,000, without forfeitures. It is assumed that the options were for services performed equally during 2021 and 2022. The options were exercisable within a one-year period beginning January 1, 2023 (if the employees were still employed by the company at the time of the exercise). On May 1, 2023, four executives exercised their options when Stardust Inc.'s shares were trading for $50 per share. On December 31, 2023, the market price of Stardust Inc.'s shares was down to $35 per share. So the fifth executive chose not to exercise any of the options, which therefore were forfeited. Instructions Prepare the necessary entries from November 1, 2020 to Dec 31, 2023 related to the stock option plan. If no entry is needed, write "No entry."
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started