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year during the service period. What amount of compensation
expense is recognized for 20x5?
Question 16
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