Problem:
Bowles Company granted options on January 1, 2017, permitting executives to purchase 800,000 of the company's $1 par common stock within the next five years, but not before December 31, 2020 (the vesting date). The exercise price is set at the stock's market price on the date of grant, $40 per share. The fair value of the options, estimated by an appropriate option pricing model, is $5 per option. At 12/31/17, 90% of the options are estimated to vest, and the stock's market value is $52/share. How much compensation expense should be recognized in 2017? Group of answer choices $3,600,000 $1,000,000 $ 900,000 $ 0Which of the following is reported as an investing activity on the statement of cash flows under US GAAP? Group of answer choices Sale of an investment security accounted for as "available for sale" Issuance of a long-term note payable Reissue treasury stock Payment of interest