assets , $ 120Expected and actual return , 10 %. Compute the reported postretirement benefit liability at year-end .
Question 10
The balance in the capitalized natural resources deposit account immediately before beginning removal operations is $ 110,000 . The date is January 1 of the current ( first ) year . The firm is then informed that to comply with environmental regulations , the site will require reclamation work in four years costing an estimated $ 30,000 at that time . 5 % is the appropriate risk adjusted rate of return . One-fourth the total estimated resource in the site was removed in the first year and was sold for $ 70,000 . Compute the increase in net income for the current year from operating the site . Ignore income taxes . The present value of $ 1 four years hence at 5 % is . 8227 .
Question 11
A stock option award was granted at the beginning of the current year ( 1 / 1 / x4 ) to three managers . The total shares granted are 30,000 ( 10,000 each ). The option price and market price of the $ 2 par common stock on the grant date was $ 6 . The options vest Dec . 31 , 20x7 . Applying an option pricing model yielded a fair value of $ 1 per option . Assume all of the options were exercised when the stock price was $ 10 . What amount of compensation expense in total is recognized over the service period and by what amount is the firm ' s net assets increased as a result of the option award .
Question 12
Because management has been so successful , key executives were granted 1,000 stock appreciation rights at the beginning of 20x4 calling for the difference between the market price of the firm ' s stock at grant date and at exercise date to be paid in cash . The employees must work for 3 years after which the rights are exercisable . The market price at the beginning of 20x4 was $ 10 , and on the exercise