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Home Q & A Board Other Fields Homework Help Business Accounting
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sholey sholey
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5 years ago
Silo Corp. granted to Donna, its superstar accountant, the option to purchase Silo common shares
for $10, on Jan. 1, 20x1. The market price of the shares on that date was $20. The options can be
exercised during the period Jan. 1, 20x4 through Jan. 1, 20x6. The number of shares under option
is determined by a formula based on Silo earnings each year. The number of shares actually under
option will be the formula value on Dec. 31, 20x3. That formula estimated the following number
of shares under option at the end of years: 20x1, 200; 20x2, 300. The formula determined the
number of shares at Dec. 31, 20x3 to be 400.
The market prices for Silo shares at the end of years: 20x1, $25;
20x2, $40, 20x3, $50. What is the recorded compensation expense for 20x2, for Donna?
A) $7,250
B) $3,000
C) $4,000
D) $4,500
E) $5,000
Textbook 
Intermediate Accounting, Volume 2

Intermediate Accounting, Volume 2


Edition: 5th
Authors:
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SAMt24SAMt24
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sholey Author
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5 years ago
Answer's right Perfect
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