Concept explainers
Performance-based options
• LO19–2
Refer to the situation described in BE 19–8. Suppose that Farmer initially estimates that it is not probable the goal will be achieved, but then after one year, Farmer estimates that it is probable that divisional revenue will increase by 5% by the end of 2020. What action will be taken to account for the options in 2019 and thereafter?
BE 19–8
Performance-based options
• LO19–2
On October 1, 2018, Farmer Fabrication issued stock options for 100,000 shares to a division manager. The options have an estimated fair value of $6 each. To provide additional incentive for managerial achievement, the options are not exercisable unless divisional revenue increases by 5% in three years. Farmer initially estimates that it is probable the goal will be achieved. How much compensation will be recorded in each of the next three years?
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INTERMEDIATE ACCT.(LL)-W/CODE >CUSTOM<
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- HW #10 (continued) JK7 [7 pts] For the satellite contract described in the in-class exercise, the build plan and spending profile is shown below. - The contract calls for the following payment profile from the customer • Payments = 80% of company expenditures in each year, with an additional milestone payment of $100M in the year that each satellite is completed • Create a spreadsheet to model the full 10-year program and use it to (a) annual cash flow (b) IRR for the full 7-satellite, 10-year program 1 2 3 4 5 6 7 8 9 10 S1 10% 30% 40% 20% S2 30% 50% 20% S3 30% 50% 20% S4 30% 50% 20% S5 30% 50% 20% S6 30% 50% 20% S7 30% 50% 20%arrow_forwardProblem 17-8A Evaluating ratlos LO4 Web Structure Inc. calculated the ratlos shown below for 2023 and 2022: Required: 1. & 2. Identify whether the change in the ratlos from 2022 to 2023 Is favourable ('F') or unfavourable (U), and calculate the 2023 ratlos for Alberta Playground Inc. Including a comparison against the Industry averages. (Select the option "Neither For U" if the option Favorable or Unfavorable is not applicable.) Current ratio Quick ratio Accounts receivable turnover Days' sales uncollected Inventory turnover Days' sales in inventory Total asset turnover Debt ratio Times interest earned Profit margin Gross profit ratio 2023 1.13 1 16 72 18.0 2022 0.89 1 36 42 A Trend Industry Average 1.6.1 16 times 21 days 5 times 70 days 2.3 times 50 times 18 % Comparison to Industry Averagearrow_forwardProblem 10-9 Scenario Analysis (LO3) The most likely outcomes for a particular project are estimated as follows: \table[[Unit price:,$70arrow_forward
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