Problem 19-2 (Algo) Stock options; graded vesting (L019-2) Pastner Brands is a calendar-year firm with operations in several countries. As part of its executive compensation plan, at January 1, 2021, the company issued 480,000 executive stock options permitting executives to buy 480,000 shares of Pastner stock for $40 per share. One-fourth of the options vest in each of the next four years beginning at December 31, 2021 (graded vesting). Pastner elects to separate the total award into four groups (or tranches) according to the year in which they vest and measures the compensation cost for each vesting date as a separate award. The fair value of each tranche is estimated at January 1, 2021, as follows: Amount Fair Value Venting Date Vesting per Option Dec. 31, 2021 $4.10 Dec. 31, 2022 250 54.60 Dec. 31, 2023 $5.40 Dec. 31, 2024 25 $5.60 250 258 Required: 1. Determine the compensation expense related to the options to be recorded each year 2021-2024, assuming Pastner allocates the compensation cost for each of the four groups (tranches) separately. 2. Determine the compensation expense related to the options to be recorded each year 2021-2024, assuming Pastner uses the straight-line method to allocate the total compensation cost. Required: 1. Determine the compensation expense related to the options to be recorded each year 2021-2024, assuming Pastner allocates the compensation cost for each of the four groups (tranches) separately. 2. Determine the compensation expense related to the options to be recorded each year 20212024, assuming Postner uses the straight-line method to allocate the total compensation cost. Complete this question by entering your answers in the tabs below. Required Required 2 Determine the compensation expense related to the options to be recorded each year 2021-2024, assuming Pastner allocates the compensation cost for each of the four groups (tranches) separately. (Enter your answers in whole dollars.) Shares Compensation Expense in: Vesting at: 2021 2022 2023 2024 Total Dec 31, 2021 0 Dec 31, 2022 0 Dec 31, 2023 Dec 31, 2024 $ 0 $ 0 $ 0 $ 0 $ 0 0 Total 0 Required 1 Required 2 > Required: 1. Determine the compensation expense related to the options to be recorded each year 2021-2024, assuming Pastner allocate compensation cost for each of the four groups (tranches) separately. 2. Determine the compensation expense related to the options to be recorded each year 2021-2024, assuming Pastner uses th straight-line method to allocate the total compensation cost. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Determine the compensation expense related to the options to be recorded each year 2021-2024, assuming Pastner uses the straight-line method to allocate the total compensation cost. (Enter your answers in whole dollars.) 2021 2022 2023 2024 Total Compensation expense $ 0
