On January 1, 2015, Ritter Company Granted Stock Options to Officers

question 130

Multiple Choice

On January 1, 2015, Ritter Company granted stock options to officers and key employees for the purchase of 15,000 shares of the company's $1 par common stock at $20 per share as additional compensation for services to be rendered over the next three years. The options are exercisable during a five-year period beginning January 1, 2018 by grantees still employed by Ritter. The Black-Scholes option pricing model determines total compensation expense to be $135,000. The market price of common stock was $26 per share at the date of grant. The journal entry to record the compensation expense related to these options for 2015 would include a credit to the Paid-in Capital-Stock Options account for

• A) $0.
• B) $27,000.
• C) $30,000.
• D) $45,000.

---

Definitions:

Ralph Waldo Emerson

A 19th-century American essayist, lecturer, philosopher, and poet who led the transcendentalist movement.

Early Labor Movement

A historical movement during the 19th and early 20th centuries where workers organized to demand better wages, conditions, and rights, leading to the formation of labor unions and significant labor laws.

Social Constraints

Refers to the societal rules, norms, or pressures that influence and limit individuals' behaviors and actions within a community or society.

Transcendentalist Movement

A philosophical movement in the mid-19th century emphasizing intuition, nature, and individualism.