Choose the correct statement about restricted stock plans . Question 17
A stock option plan granted 2,000 options each with a fair value of $ 2.50 on January 1 , 20x4 . The option price was $ 20 per share and the stock price was $ 5 on the grant date . The options were exercisable beginning 20x7 and were exercised when the market price of the $ 5 par stock was $ 50 . The journal entry to record the issuance of stock to the option holders at date of exercise will include :
Question 18
On August 31 , 20x4 , Harvey Co . decided to change from the FIFO periodic inventory system to the weighted average periodic inventory system . Harvey is on a calendar year basis . The cumulative effect of the change is determined
Question 19
For its first year of operations , Cable Corp . recorded a $ 100,000 expense in its tax return that will not be recorded in its accounting records until next year . There were no other differences between its taxable and financial statement income . Cable ' s effective tax rate for the current year is 45 %, but a 40 % rate has already been passed into law for next year . In its year-end balance sheet , what amount should Cable report as a deferred tax asset ( liability )?
Question 20