question archive On January 1, 2012, Sammy Corp
On January 1, 2012, Sammy Corp
Subject:AccountingPrice: Bought3
On January 1, 2012, Sammy Corp. granted an employee an option to purchase 9,000 shares of Sammy's $5 par value common stock at $20 per share. The Black-Scholes option pricing model determines total compensation expense to be $210,000. The option became exercisable on December 31, 2013, after the employee completed three years of service. The market prices of Sammy's stock were as follows: January 1, 2012 $30 December 31, 2014 50 For 2012, Sammy should recognize compensation expense under the fair value method of
a. $90,000. b. $150,000. c. $70,000. d. $0.
