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:

Cash Flow From Financing

This represents the net flows of cash that are used to fund a company, including debt, equity, and dividend payments.

Cash Flow From Extraordinary Events

The cash generated or used by a company from events that are unusual, infrequent, and not likely to happen in the foreseeable future.

Cash Flow From Investment Activities

A section of a company's cash flow statement that shows the cash spent on and received from investment activities, reflecting how much is invested in the business.

Cash Flow From Operating Activities

The amount of cash generated by a company's regular business operations.