Connect CSecure https//newconnect.mheducation.com/flow/connect.html Ch. 19 - Bri

Question

Connect CSecure https//newconnect.mheducation.com/flow/connect.html Ch. 19 - Brief Exercises (80 minutes) Help Save & Exlt Submlt Saved 3 Check my work 9 Brief Exercise 19-9 Performance-based options [LO19-2] On October 1, 2018, Farmer Fabrication issued stock options for 150,000 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 3% in three years. Suppose that after one year, Farmer estimates that it is not probable that divisional revenue will increase by 3% in three years. 6.25 points eBook 1. What is the revised estimate of the total compensation? 2. What action will be taken to account for the options in 2019? Reterences 1. Estimated total compensation 2. What action will be taken to account for the options in 2019? Mc Graw Hill ?Prey 90r 16? Next> ???@) a e ^??4, 4/17/2018 8-34 PM |

Explanation / Answer

a) Number of stock options 150000 Fair value 5 Total compensation 750000 b) As it is not possible to achieve more than 3% so the compensation expense will be reversed

Related Questions

Navigate

• Browse (All)
• Browse C
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.