I need a detailed explanation, step by step. Thanks. Several years ago, the Johnson Co....
60.1K
Verified Solution
Link Copied!
Question
Accounting
I need a detailed explanation, step by step. Thanks.
Several years ago, the Johnson Co. granted options on 5,000 shares of its common stock. The fair market value of each option on the grant date was $3 per share. The exercise price is $2. The tax rate (all years) is 20%. The options are exercised at the end of the current year. At the beginning of the current year "Paid-in capital tax effect of stock options" had a credit balance of $10,000
1. What is the ending balance of Paid-in capital tax effect of stock options if the fair market value of the stock on the exercise date was $3 per share?
2. What is the balance of Paid-in capital tax effect of stock options at the end of the current year if the fair market value of Johnson's stock on the exercise date was $11 per share?
3. What is the ending Paid-in capital tax effect of stock options, if the market price of the stock on the exercise date is $5.
Answer & Explanation
Solved by verified expert
Get Answers to Unlimited Questions
Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!
Membership Benefits:
Unlimited Question Access with detailed Answers
Zin AI - 3 Million Words
10 Dall-E 3 Images
20 Plot Generations
Conversation with Dialogue Memory
No Ads, Ever!
Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
