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1) Which of the following statements is correct?
A) On the grant date, no journal entry is made for the stock options because neither the employees nor Manders executed the contract.
B) On the grant date, Manders total compensation expense is estimated to be $450,000.
C) A and B.
D) Neither A nor B.
2) Which of the following statements is correct?
A) In the adjusting journal entry made on December 31, 2016, “paid in capital-stock options” should be credited for $150,000.
B) In the entry to record the forfeiture of the stock options in 2017, “paid in capital-expired stock options” should be debited for $36,000.
C) A and B.
D) Neither A nor B.
3) For the year ended December 31, 2017, the net compensation expense related to Manders stock options was
A) $78,000.
B) $114,000.
C) $150,000.
D) $87,000.
4) Which of the following statements is correct?
A) Compensation expense for 2018 is $114,000.
B) At December 31, 2018, the balance in the account “paid in capital-stock options’ is $342,000.
C) A and B.
D) Neither A nor B.
5) As a result of the exercise of the 140,000 options in 2020,
A) Paid in capital-stock options should be debited for $290,000.
B) Paid in capital—excess over par should be credited for $5,012,000.
C) A and B.
D) Neither A nor B.
6) As a result of the expiration of the remaining stock options in 2022,
A) Paid in capital-stock options should be debited for $90,000.
B) Compensation expense should be credited for $72,000.
C) Paid in capital-expired stock options should be credited for $18,000.
D) A, B, and C.
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