Which of the Following Statements Correctly Describes This Journal Entry

question 72

Multiple Choice

Which of the following statements correctly describes this journal entry: $$\begin{array} { | c | l | c | r | } \hline \mathrm { Dr } & \text { Cash at bank } & 30000000 & \\\hline \mathrm { Cr } & \text { Share capital } & & 30000000 \\\hline & & & \\\hline \mathrm { Dr } & \text { Share options (1 } 000000 \text { options) } & 3500000 & \\\hline \mathrm { Cr } & \text { Share capital } & & 3500000 \\\hline\end{array}$$

• A) The issue of options, costing $3.50 each.
• B) The issue of options, costing $30 each.
• C) The exercise of options, with a current market value per share of $3.50.
• D) The exercise of options, initially costing $3 500 000 to issue and with an exercise price for each option of $30.

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Definitions:

Level of Activity

A measure of the volume of production or operations, often influencing costs and profitability in a business.

Variable Costs

Expenses that vary in relation to the amount of products or services a company generates.

Fixed Costs

Expenses that do not change with the level of goods or services produced by a business over a certain period.

Net Income

The total earnings of a company after all expenses and taxes have been subtracted from total revenue.