On January 1, 2011, Ritter Company Granted Share Options to Officers

question 51

Multiple Choice

On January 1, 2011, Ritter Company granted share options to officers and key employees for the purchase of 10,000 ordinary shares of the company's $1 par 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, 2014 by grantees still employed by Ritter.The Black-Scholes option pricing model determines total compensation expense to be $90,000.The market price of ordinary shares was $26 per share at the date of grant.The journal entry to record the compensation expense related to these options for 2011 would include a credit to the Share Premium-Share Options account for

• A)$0.
• B)$18,000.
• C)$20,000.
• D)$30,000.

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Definitions:

Inulin

A type of soluble fiber found in various plants, used as a food additive and for medical tests of kidney function.

Creatinine

Creatinine is a waste product generated from muscle metabolism, commonly measured to assess kidney function.

Glomerular Filtrate

The fluid that passes from the blood through the capillary walls of the glomeruli of the kidney during the formation of urine.

Proximal Convoluted Tubule

A portion of the nephron in the kidney where significant amounts of reabsorption and secretion occur, playing a critical role in the regulation of body fluid composition.