Retained Earnings - Recording an Expense
Under the disclosure provisions of SFAS No.123, the estimated stock option expense for 2006 would be $15,500 for W Co.. When the company records this expense:
A) retained earnings account has no effect
B) the equity on b/s has no effect
C) the total assets increase by 15,500
D) the capital decreases by 15,500
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D) the capital decreases by 15,500
It decreases capital because ...
Solution Summary
This solution explains the correct answer for W Co. under the disclosure provisions of SFAS No. 123.
$2.19