Assume That All Compensation Expense from the Stock Options Granted

question 54

Multiple Choice

Assume that all compensation expense from the stock options granted by Wilson already has been recorded. Further assume that 200,000 options expire in 2014 without being exercised. The journal entry to record this would include:

• A)Debit to paid-in capital-stock options for $8 million.
• B)A debit to common stock for $5 million.
• C)A debit to paid-in capital-expiration of stock options for $8 million.
• D)None of these is correct.This is 200,000 options that had been recorded by credits to paid-in capital-stock options for $8 million, i.e., 200,000 options $40 option.This is reversed at expiration.

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Definitions:

Priority "C"

A classification in task or project management denoting items that are nice to do but not critical, often used in a system that ranks items from A (most important) to C (least important).

Planning Horizon

The timeframe over which a plan or strategy is developed and implemented, influencing the scope and objectives of the planning process.

Planning and Control

The processes used to set objectives, determine strategies to achieve them, execute the plans, and ensure performance meets expectations.

Benefit of Objectives

The advantage of having clear and defined goals which guide actions and decisions, improving focus and facilitating measurement of progress.