Under its executive stock option plan, National Corporation granted 30 million options on January 1, 2021, that permit executives to purchase 30 million of the company's $1 par common shares within the next eight years, but not before December 31, 2025 (the vesting date). The exercise price is the market price of the shares on the date of grant. $30 per share. The fair value of the options, estimated by an appropriate option pricing model, is $2 per option. No forfeitures are anticipated. 1. Ignoring taxes, what is the total compensation cost pertaining to the stock options? 2. Ignoring taxes, what is the effect on earnings in the year after the options are granted to executives? (For all requirements, enter your answer in millions (l.e.. 10,000,000 should be entered as 10).) Answer is not complete. 1. Total compensation cost S 60 million 2. Effect on earnings decreased by million Under its executive stock option plan, National Corporation granted 25 million options on January 1, 2021, that permit executives to purchase 25 million of the company's $1 par common shares within the next six years, but not before December 31, 2023 (the vesting date). The exercise price is the market price of the shares on the date of grant, $29 per share. The fair value of the options, estimated by an appropriate option pricing model, is $3 per option. Suppose that unexpected turnover during 2022 caused the forfeiture of 5% of the stock options. Compute the amount of compensation expense for 2022 and 2023. (Enter your answers in millions rounded to 2 decimal places (l.e., 5,500,000 should be entered as 5.50)) Compensation expense 2022 2023 (Sin millions) On January 1, 2021, Farmer Fabrication issued stock options for 400,000 shares to a division manager. The options have an estimated fair value of $7 each. To provide additional incentive for managerial achievement, the options are not exercisable unless divisional revenue increases by 4% in five years. Suppose that after one year, Farmer estimates that it is not probable that divisional revenue will increase by 4% in five years. Required: 1. What is the revised estimate of the total compensation? 2. What action will be taken to account for the options in 2022? 3. What journal entry will be needed to account for the options in 2022? Answer is not complete. Complete this question by entering your answers in the tabs below. Req 1 and 2 Req 3 What is the revised estimate of the total compensation and what action will be taken to account for the options in 2022? 1. Estimated total compensation 2. What journal entry will be needed to account for the options in 2022? Farmer will reverse the 2021 recorded compensation. Req 1 and 2 Req 3 > Required: 1. What is the revised estimate of the total compensation? 2. What action will be taken to account for the options in 2022? 3. What journal entry will be needed to account for the options in 2022? Answer is not complete. Complete this question by entering your answers in the tabs below. Req 1 and 2 Req 3 What journal entry will be needed to account for the options in 2022? (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Do not round intermediate calculations.) No Date 1 2022 General Journal Paid-in capital-stock options Compensation expense < Req 1 and 2 Reg 3 > Debit Credit On January 1, 2021, Farmer Fabrication issued stock options for 180,000 shares to a division manager. The options have an estimated fair value of $5 each. To provide additional incentive for managerial achievement, the options are not exercisable unless divisional revenue increases by 5% in three years. Suppose that Farmer initially estimates that it is not probable the goal will be achieved, but then after one year, Farmer estimates that it is probable that divisional revenue will increase by 5% by the end of 2023. Required: 1. What is the revised estimate of the total compensation? 2. What action will be taken to account for the options in 2022? 3. Prepare the journal entries to record compensation expense in 2022 and 2023. Answer is not complete. Complete this question by entering your answers in the tabs below. Req 1 and 2 Req 3 What is the revised estimate of the total compensation and what action will be taken to account for the options in 2022? 1. Estimate total compensation $ 900,000 ( 2. What action will be taken to account for the options in 2022? Farmer will reflect the cumulative effect on compensation in 2022 earnings. Rag 1 and 2 Req 3 > On January 1, 2021, Farmer Fabrication issued stock options for 180,000 shares to a division manager. The options have an estimated fair value of $5 each. To provide additional incentive for managerial achievement, the options are not exercisable unless divisional revenue increases by 5% in three years. Suppose that Farmer initially estimates that it is not probable the goal will be achieved, but then after one year, Farmer estimates that it is probable that divisional revenue will increase by 5% by the end of 2023. Required: 1. What is the revised estimate of the total compensation? 2. What action will be taken to account for the options in 2022? 3. Prepare the journal entries to record compensation expense in 2022 and 2023. Answer is not complete. Complete this question by entering your answers in the tabs below. Req 1 and 2 Req 3 Prepare the journal entries to record compensation expense in 2022 and 2023. (If no entry is required for a transaction/event, select "No journal entry required" In the first account field. Do not round intermediate calculations. Round your final answers to the nearest whole dollar.) 1 No Date 2022 General Journal Compensation expense Paid-in capital-stock options < Req 1 and 2 Req 3 Debit Credit