Accounting

6364 Words Oct 16th, 2013 26 Pages
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Xilinx, Inc.—Stock-based Compensation
Xilinx, Inc. designs, develops, and markets complete programmable logic solutions, including advanced integrated circuits, software design tools, predefined system functions delivered as intellectual property cores, customer training, field engineering and technical support. Customers are electronic equipment manufacturers primarily in the telecommunications, networking, computing, industrial, and consumer markets. Products are sold globally through a direct sales management organization and through franchised domestic and foreign distributors. (Source: Company 2007 Form 10-K)

Learning Objectives • Discuss the economic and corporate issues surrounding stock-based compensation. • Understand
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i. ii. iii. iv. v. According to the table on page 48, what total expense does Xilinx report for stock-based compensation in 2007? Where on the Statement of Income does Xilinx include this expense? Explain. How does the 2007 expense affect the Statement of Cash Flows? Reconcile the Statement of Income and Statement of Cash Flows for this expense. Explain in general terms, the income tax effects of Xilinx’s 2007 stock-based compensation expense. Prepare the journal entry to record Xilinx’s 2007 stock-based compensation expense. Your journal entry should include tax effects.

g. Note 3 discloses the following information about stock-option expirations, “Options currently granted (i.e., prior to 2007) … generally expire ten years from the grant date.” (page 47 of annual report); and “The term for options granted under the 2007 Plan will be seven years.” (page 51 of annual report). Explain how the change in option expiration from 10 years to seven years affects Xilinx’s stock option expense.  Analysis  h. Consider the discussion of the fair values of stock options at the bottom of page 49 of the Xilinx annual report. i. ii. iii. How does Xilinx determine the fair values of stock options? What is the per share average fair value of options granted during fiscal 2007? Compare the per-share average fair value of options granted during 2007 to the average pershare exercise price of those option grants (from question e, i). Why are these two numbers

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