On January 1, Year 1, Abbott Company granted 92,000 stock options to certain executives. The options are exercisable no sooner than December 31, Year 3, and expire on January 1, Year 7. Each option can be exercised to acquire one share of $1 par common stock for $14. An option-pricing model estimates the fair value of the options to be $5 on the date of grant. What is the amount of compensation expense for Year 1? (Round your answer to the nearest dollar amount.)

$153,333

Explanation:

The computation of the compensation expense for the year 1 is shown below:

= (Number of Stock options granted × fair value of the options) ÷ (number of years)

= (92,000 stock options × $5) ÷ 3 years

= $460,000 ÷ 3 years

= $153,333

By applying the above formula we can get the compensation expense for the year 1

b. a single paragraph.

a paragraph is a series of sentences that are organized and make sense, and are all related to a single topic . almost every piece of writing you do that is longer than a few sentences should be organized into paragraphs. this is because paragraphs show a reader where the subdivisions of an essay begin and end, and thus the reader see the organization of the essay into subjects in order to be able to understand its main points.