ACC 577 OUTLET Learn by Doing/acc577outlet.com ACC 577 OUTLET Learn by Doing/acc577outlet.com | Page 54

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 date (during 20x7) was $18.
The fair values of one right, based on an option pricing model,
are as follows: What amount of compensation expense is
recognized for years 20x6 and 20x7?
Question 13
Mobe Co. reported the following operating income (loss) for its
first three years of operations: For each year, there were no
deferred income taxes, and Mobe's effective income tax rate
was 30%. In its 2004 income tax return, Mobe elected to carry
back the maximum amount of loss possible. In its 2005 income
statement, what amount should Mobe report as total income
tax expense?
Question 14
Interest cost included in the net pension cost recognized for a
period by an employer sponsoring a defined benefit pension
plan represents the
Question 15
At the beginning of 20x4, XCOR Inc. granted executives a total
of 2,000 options to purchase the firm's stock beginning in 20x7.
The fair value of each option at grant date was $3. Initially, no
forfeitures were anticipated. During 20x5 however, forfeitures
are apparent. The firm estimates a 2% forfeiture rate each