Prepare the Necessary Entries from 1/1/14-2/1/16 for the Following Events

question 15

Essay

Prepare the necessary entries from 1/1/14-2/1/16 for the following events using the fair value method. If no entry is needed, write "No Entry Necessary."1. On 1/1/14, the stockholders adopted a stock option plan for top executives whereby each might receive rights to purchase up to 18,000 shares of common stock at $40 per share. The par value is $10 per share.2. On 2/1/14, options were granted to each of five executives to purchase 18,000 shares. The options were non-transferable and the executive had to remain an employee of the company to exercise the option. The options expire on 2/1/16. It is assumed that the options were for services performed equally in 2014 and 2015. The Black-Scholes option pricing model determines total compensation expense to be $1,900,000.3. At 2/1/16, four executives exercised their options. The fifth executive chose not to exercise his options, which therefore were forfeited.

Learn how the Consumer Price Index (CPI) is calculated and its importance in measuring inflation.

Recognize how inflation affects purchasing power and the real value of money.

Understand the relationships between inflation, deflation, and economic indicators such as the unemployment rate.

Identify government and central bank roles in managing the economy and addressing inflation.

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Definitions:

Cross-sectional Studies

Research methods that analyze data from a population, or a representative subset, at a specific point in time.

IQ

An abbreviation for Intelligence Quotient, a standardized score used to measure human intelligence, derived from various tests.

Younger Adults

Individuals in an age group that typically ranges from late teens to early thirties.

Everyday Problem Solving

The cognitive process of tackling routine or familiar issues that arise in daily life.