Advanced Financial Accounting
12th Edition
ISBN: 9781259916977
Author: Christensen, Theodore E., COTTRELL, David M., Budd, Cassy
Publisher: Mcgraw-hill Education,
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Chapter 16, Problem 16.11.3AE
To determine
Concept introduction:
Personal financial statement: Each partner is required to furnish personal financial statements to determine each partner’s personal solvency. A personal financial statement consists of a statement of financial condition or a personal balance, sheet and statement of change in net worth, or personal income statement. ASC 274 gives guidelines for the preparation of personal financial statements.
To choose: Correct answer to determine net worth of R after giving effect to stock options.
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Recording Entries for Restricted Stock Unit Plan
In late 2020, the board of directors of Arches Corp. approved a restricted stock unit plan to be awarded to select employees. The plan included the following general terms.
Each restricted stock unit is equivalent to one share of $5 par value, common stock of Arches Corp.
The restricted stock units vest two years after the date of the grant.
Shares are distributed after the vesting period if the employee is still employed by the company.
On December 31, 2020, 15,600 restricted stock units were granted to key employees under this plan when the market price of the common stock was $18 per share.
Required
a. Compute the total amount of compensation cost for the restricted stock unit plan.b. Prepare the journal entry on the date of grant, December 31, 2020.c. Prepare the journal entry on December 31, 2021.d. Prepare the journal entry on December 31, 2022, including the issuance of the shares of stock.
Note: If a journal entry isn't…
Shares Sold – Subscription Basis
On January 1, 2020, Aylmer offered to sell some shares on a subscription basis. The offer was for fifty individuals to purchase 100 common shares each at $20 per share. 60% of the amount was paid on June 30,2020. That transaction was recorded properly in the accounting records of Aylmer. The remaining amount will be received on June 30, 2021.
NOTE - There is not a spreadsheet in the Excel file. Review the trial balance. You should determine if an entry should be made or not and make the required entry(ies) as necessary in the Excel tab labelled “Journal Entries”
Trial Balance
Unadjusted Trial Balance
At December 31, 2019
At December 31, 2020
Preferred Shares
500,000
500,000
Common Stock
1,000,000
1,500,000
Common Stock Subscribed
100,000
Retained Earnings
337,366
692,275
Darius Inc. granted 200,000 stock options to its employees. The options expire 10 years after the grant date of January 1, 2021. The share price was $23 when the options were issued. Employees who are still with the company five years after the grant date may exercise the options to purchase shares at $45 per share. A consultant has estimated the value of each option on the grant date to be $2.50 per option. How much compensation expense should Darius Inc. record in 2021?
Question 5 options:
$460,000
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Chapter 16 Solutions
Advanced Financial Accounting
Ch. 16 - What are the major causes of a dissolution? What...Ch. 16 - Prob. 16.2QCh. 16 - Prob. 16.3QCh. 16 - Prob. 16.4QCh. 16 - Contrast a lump-sum liquidation with an...Ch. 16 - Prob. 16.6QCh. 16 - Prob. 16.7QCh. 16 - Prob. 16.8QCh. 16 - Prob. 16.9QCh. 16 - Prob. 16.10Q
Ch. 16 - Prob. 16.11QCh. 16 - The installment liquidation process uses a...Ch. 16 - Prob. 16.13QCh. 16 - Prob. 16.14QCh. 16 - Prob. 16.15QCh. 16 - Cash Distributions to Partners Analysis The...Ch. 16 - Prob. 16.2CCh. 16 - Prob. 16.3CCh. 16 - Sharing Losses during Liquidation Research Hiller,...Ch. 16 - Prob. 16.1.1ECh. 16 - Prob. 16.1.2ECh. 16 - Prob. 16.1.3ECh. 16 - Prob. 16.1.4ECh. 16 - Prob. 16.1.5ECh. 16 - Prob. 16.1.6ECh. 16 - Prob. 16.1.7ECh. 16 - Prob. 16.2.1ECh. 16 - Prob. 16.2.2ECh. 16 - Prob. 16.2.3ECh. 16 - Prob. 16.2.4ECh. 16 - Prob. 16.2.5ECh. 16 - Prob. 16.2.6ECh. 16 - Prob. 16.3ECh. 16 - Prob. 16.4ECh. 16 - Prob. 16.5ECh. 16 - Prob. 16.6ECh. 16 - Prob. 16.7ECh. 16 - Prob. 16.8ECh. 16 - Confirmation of Cash Distribution Plan Refer to...Ch. 16 - Prob. 16.10ECh. 16 - Prob. 16.11.1AECh. 16 - Prob. 16.11.2AECh. 16 - Prob. 16.11.3AECh. 16 - Prob. 16.11.4AECh. 16 - Prob. 16.11.5AECh. 16 - Prob. 16.11.6AECh. 16 - Prob. 16.11.7AECh. 16 - Prob. 16.11.8AECh. 16 - Prob. 16.11.9AECh. 16 - Prob. 16.11.10AECh. 16 - Prob. 16.11.11AECh. 16 - Prob. 16.12AECh. 16 - Prob. 16.13PCh. 16 - Prob. 16.14PCh. 16 - Prob. 16.15PCh. 16 - Prob. 16.16PCh. 16 - Prob. 16.17PCh. 16 - Prob. 16.18PCh. 16 - Matching Terms Match the items in the left-hand...Ch. 16 - Prob. 16.20P
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