On June 30, 2018, Kinshasa Corp

question 6

Multiple Choice

On June 30, 2018, Kinshasa Corp. granted stock options for 30,000 of its no par value common shares to key employees, at an option price of $ 36. On that date, the market price of the common shares was $ 32. The Black-Scholes option pricing model determined total compensation expense to be $ 720,000. The options are exercisable beginning January 1, 2021, provided the key employees are still employed by Kinshasa at the time the options are exercised. The options expire on June 30, 2022. On January 2, 2021, when the market price of the shares was $ 42, all 30,000 options were exercised. The amount of compensation expense Kinshasa should have recorded for calendar 2020 is

• A) $ 120,000.
• B) $ 288,000.
• C) $ 360,000.
• D) $ 720,000.

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Definitions:

Basilar Membrane

The basilar membrane is a structure in the cochlea of the inner ear; it plays a crucial role in the sense of hearing by facilitating the conversion of sound vibration into neural signals.

Kinesthesis

The sense of muscle movement and position, allowing individuals to perceive their body's actions and location even without visual cues.

Audition

The sense of hearing; the process by which sound waves are detected and interpreted by the brain.

Sensory Interaction

The process by which multiple sensory modalities interact to influence perception and behavior, such as how taste and smell combine to create flavor.