On January 1, 2013, Robertson Company Created a Fixed Compensatory

question 56

Essay

On January 1, 2013, Robertson Company created a fixed compensatory stock option plan for employees to acquire 18,000 shares of $3 par common stock for $22 a share. The options vest after four years of employment, and therefore, they cannot be exercised until January 1, 2017 On the grant date, the fair value of the options was $5 per option. All options were exercised on June 30, 2017. Robertson Company accounts for this plan using the fair value method.
Required:
Record all entries relating to this stock option plan over the life of the plan.

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Definitions:

Know-how

Practical knowledge, expertise, or skill in how to do something efficiently and effectively, often gained through experience.

Risk Propensity

An individual's or organization's inclination or tendency to undertake actions that have uncertain outcomes, potentially involving loss or danger.

Anticipated Outcomes

Anticipated outcomes are the expected results or consequences of an action or decision.

Ranking Items

The process of organizing items or options in a sequential order based on their value, quality, importance, or other criteria.