Share- based compensation
Not what you're looking for?
The Buford Corporation provides an executive stock option plan. Under the plan, the company granted options on January 1, 2006, that permit executives to acquire 12 million of the company's $1 par value common shares within the next five years, but not before December 31, 2009 (the vesting date). The exercise price is the market price of the shares on the date of the grant, $14 per share. The fair value of the options, estimated by an appropriate model, is $3 per option. No forfeitures are anticipated. Ignore taxes.
(a) Determine the total compensation cost pertaining to the options, assuming Buford chooses to follow the FASB's accounting approach for fixed compensation plans. Show calculations.
(b) Prepare the appropriate journal entry (if any) to record the award of options on January 1, 2006.
(c) Prepare the appropriate journal entry (if any) to record compensation expense on December 31, 2006.
Purchase this Solution
Solution Summary
The solution discusses share based compensation for Buford Corporation.
Purchase this Solution
Free BrainMass Quizzes
Motivation
This tests some key elements of major motivation theories.
Marketing Research and Forecasting
The following quiz will assess your ability to identify steps in the marketing research process. Understanding this information will provide fundamental knowledge related to marketing research.
Marketing Management Philosophies Quiz
A test on how well a student understands the basic assumptions of marketers on buyers that will form a basis of their marketing strategies.
Understanding Management
This quiz will help you understand the dimensions of employee diversity as well as how to manage a culturally diverse workforce.
Basic Social Media Concepts
The quiz will test your knowledge on basic social media concepts.