Pleas double check my work on the above problem Thank you On

Pleas double check my work on the above problem. Thank you.

On October 15, 2015, the board of directors of Ensor Materials Corporation approved a stock option plan for key executives. 1 On January 1, 2016, 20 million stock options were granted, exercisable for 20 million shares of Ensor\'s $1 par common stock. The options are exercisable between January 1, 2019 and December 31, 2021, estimated by an appropriate option pricing model, is $6 per option. Two million options were forfeited when an executive resigned in 2017. All other options were exercised on July 12, 2020, when the stock\'s price jumped unexpectedly to $19 per share. 5 1) When is Ensor\'s stock option measurement date? The measurement date is the sane as the grant date, January 1, 2016. 2) Determine the compensation expense for the stock option plan in 2016 (ignore taxes) $6 x 20,000,000 shares-$12 0,000,000/3 years $40,000,000 per year, thus $40,000,000 compensation expense for 2016.

Solution

the answer to requirement 5 seems incorrect, as we have already recorded the expense amount of $6 on 18 million stock in three years. now price changed to $19 per stock, as we have already expensed out $6 per stock, we are short of $ 13 per stock, which we should expense out in the year of subscription i.e. 2020.

from where did you find cash i.e. 15$ per stock.?

As nothing given in the question, it is assumed that stock are totally free for the employees.

1. Compensation expenses 234,000,000 (180,000,000 * 13)

Paid in Capital - Stock options 234,000,000

2. Paid in Capital - Stock options 342,000,000 (180,000,000 * 19)

Common Stock 18,000,000

Paid-In Capital In Excess of Par Value 324,000,000 (180,000,000 * 18)