Red Company Is a Calendar-Year U

question 47

Multiple Choice

Red Company is a calendar-year U.S.firm with operations in several countries.At January 1,2016,the company had issued 40,000 executive stock options permitting executives to buy 40,000 shares of stock for $25.The vesting schedule is 20% the first year,30% the second year,and 50% the third year (graded-vesting) .The fair value of the options is estimated as follows:
What is the compensation expense related to the options to be recorded in 2017?

• A)$ 48,000.
• B)$ 96,000.
• C)$128,000.
• D)$140,000.

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Definitions:

Photoheterotrophs

Organisms that obtain their energy from sunlight but rely on organic compounds from the environment as their carbon source.

Photosystem I

A component of the chloroplast's thylakoid membrane in plants that is involved in the light-dependent reactions of photosynthesis, specifically known for aiding in the process of converting solar energy into chemical energy.

Reaction Center

The portion of a photosystem that includes chlorophyll a molecules capable of transferring electrons to a primary electron acceptor, which is the first of several electron acceptors in a series. See antenna complex and photosystem.

Antenna Complex

The arrangement of chlorophyll, accessory pigments, and pigment-binding proteins into light-gathering units in the thylakoid membranes of photoautotrophic eukaryotes. See reaction center and photosystem.