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(1)
Restricted stock: These are the share-based awards provided as compensation plans provided as incentives to the employees which include right to receive the shares and are restricted to employees’ extended tenure. The two variants of restricted stock are restricted stock awards, and restricted stock units.
Restricted stock units (RSUs): RSU is a right of the employee to receive a certain number of shares of stock of the company as a performance incentive, or usual compensation, or signing bonus.
To determine: The compensation cost of RSUs
(2)
To prepare:
(3)
Journal entry: Journal entry is a set of economic events which can be measured in monetary terms. These are recorded chronologically and systematically.
Debit and credit rules:
- Debit an increase in asset account, increase in expense account, decrease in liability account, and decrease in
stockholders’ equity accounts. - Credit decrease in asset account, increase in revenue account, increase in liability account, and increase in stockholders’ equity accounts.
To journalize: The entry for compensation expense on December 31, 2018
(4)
To journalize: The entry for compensation expense on December 31, 2019
(5)
To journalize: The entry for compensation expense on December 31, 2020
(6)
To journalize: The entry for recording restrictions lifted as on December 31, 2020
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Chapter 19 Solutions
INTERMEDIATE ACCOUNTING(LL)-W/2 ACCESS
- Exercise 19-11 (Algo) Employee share purchase plan; MacroApps [LO19-3] MacroApps Corporation's disclosure notes for the year ending June 30, 2020, included the following regarding its $0.00000625 par common stock: Employee Stock Purchase Plan-We have an ESPP for all eligible employees. Shares of our common stock may be purchased by employees at three-month intervals at 85% of the fair market value on the last trading day of each three-month period. Employees may purchase shares having a value not exceeding 15% of their gross compensation during an offering period. Employees purchased the following shares during the periods presented: (Shares in millions) Year Ended June 30, Shares purchased Average price per share As of June 30, 2020, 96 million shares of our common stock were reserved for future issuance through the ESPP. Required: Prepare the journal entry that summarizes MacroApps's employee share purchases for the year ending June 30, 2020. Note: If no entry is required for a…arrow_forwardQuestion 5 On January 2, 2020, Theodora Company purchased 40,000 shares of Byzantine, Inc. stock at P100 per share. Brokerage fees amounted to P120,000. A P5 dividend per share of Byzantine, Inc. shares had been declared on December 15, 2019, to be paid on March 31, 2020 to shareholders of record on January 31, 2020. The shares are designated as FVTOCI. On December 31, 2020 the investment has a fair value of P4,200,000. How much should be recognized in the 2020 other comprehensive income related to these securities? Group of answer choices P400,000 P200,000 P80,000 P280,000arrow_forwardh. 2. What amount should be reported as básic EPS for 2021 Problem 19-16 (AICPA Adapted) 10 fo Strauch Company had one class of share capital outstanding and no other securities that are potentially convertible into ordinary shares. During 2021, 120,000 shares were outstanding. a. b. On April 1, 2022, 40,000 shares of treasury were sold, and on July 1, 2022, a 2-for-1 share split was issued. C. d. Net income was P6,000,000 in 2022 and P3,600,000 in 2021. Pr 1. What amount should be reported as basic EPS for 2022 Du 20 sh. in the 2022 comparative income statement? a. 25.00 b. 20.00 c. 18.75 d. 37.50 P3 pa WE in the 2022 comparative income statement? a. a. 30,00 b. 15.00 C. 45.00 d. 22.50 b. C. d. 602arrow_forward
- Exercise 19-11 (Static) Employee share purchase plan; Microsoft [LO19-3] Microsoft Corporation's disclosure notes for the year ending June 30, 2020, included the following regarding its $0.00000625 par common stock: Employee Stock Purchase Plan-We have an ESPP for all eligible employees. Shares of our common stock may be purchased by employees at three-month intervals at 90% of the fair market value on the last trading day of each three-month period. Employees may purchase shares having a value not exceeding 15% of their gross compensation during an offering period. Employees purchased the following shares during the periods presented: (Shares in millions) Year Ended June 30, Shares purchased 2018 13 $76.40 Average price per share. $142.22 As of June 30, 2020, 96 million shares of our common stock were reserved for future issuance through the ESPP. No Required: Prepare the journal entry that summarizes Microsoft's employee share purchases for the year ending June 30, 2020. Note: If no…arrow_forwardExercise 19-11 (Static) Employee share purchase plan; Microsoft [LO19-3] Microsoft Corporation's disclosure notes for the year ending June 30, 2020, included the following regarding its $0.00000625 par common stock Employee Stock Purchase Plan-We have an ESPP for all eligible employees. Shares of our common stock may be purchased by employees at three-month intervals at 90% of the fair market value on the last trading day of each three-month period. Employees may purchase shares having a value not exceeding 15% of their gross compensation during an offering period. Employees purchased the following shares during the periods presented: (Shares in millions) Year Ended June 30, Shares purchased Average price per share. 2020 9 2019 11 $142.22 2018 13 $104.85 $76.40 As of June 30, 2020, 96 million shares of our common stock were reserved for future issuance through the ESPP Required: Prepare the journal entry that summarizes Microsoft's employee share purchases for the year ending June 30,…arrow_forwardExercise 18-11 (Algo) Retirement of shares [LO18-5] In 2024, Borland Semiconductors entered into the transactions described below. In 2021, Borland had issued 170 million shares of its $1 par common stock at $29 per share. Required: Assuming that Borland retires shares it reacquires, record the appropriate journal entry for each of the following transactions: Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in millions (i.e., 10,000,000 should be entered as 10). 1. On January 2, 2024, Borland reacquired 13 million shares at $28.00 per share. 2. On March 3, 2024, Borland reacquired 13 million shares at $31 per share. 3. On August 13, 2024, Borland sold 1 million shares at $37 per share. 4. On December 15, 2024, Borland sold 2 million shares at $31 per share. View transaction listarrow_forward
- Ex 3. On December 31, 2026, Orange Mountain Co. grants its employees options to purchase 1,000 shares of $1 par common stock for $5 per share. The options vest after 1 year and expire on December 31, 2031. On the date of grant, the shares are trading for $10 per share and the options have a fair value of $3 each. Make the journal entry to recognize the compensation expense associated with the options on December 31, 2027. Assume all the options were exercised on January 1, 2028. Make the journal entry to recognize the exercise of the stock options. What additional information would you need to determine the effect of the stock options on Dilutive EPS?arrow_forwardProblem 24-7 (IFRS) On January 1, 2020, Easy Company granted 30,000 share options to employees. The share options will vest at the end of three years provided the employees remain in service until then. The option price is P60 and the entity's share price is also P60 at the date of grant. The par value of the share is P50. At the date of grant, the entity concluded that the fair value of the share options cannot be estimated reliably. The share options have a life of 6 years. This means that the options can be exercised within three years after vesting. All share options vested at the end of three years and no employees left during the three-year period. The share prices and the number of share options exercised are set out below. Share price Share options exercised at year-end 2020 63 2021 66 2022 75 10,000 15,000 5,000 2023 88 2024 100 2025 90 Required: 1. Determine the compensation expense for each year from 2020 to 2025 using the intrinsic value method. 2. Prepare journal entries…arrow_forward#16On December 1, 2019, Ceniza corporation received a donation of 3,000 shares of its P50 parvalue ordinary shares from a shareholder. On that date, the share’s market value was 350per share. The stock was originally issued for P250 per share. By what amount would thisdonation cause total shareholder’s equity to decrease? Answer = 0 pls provide the correct solution for the given answerarrow_forward
- Share-based Compensation (Share Options) (PFRS 2)Problem 20. On January 1,2011, Smart Inc. granted 200 share options each to 1,000 employees,conditional upon the employee’s remaining in the entity’s employ during the vesting period. The shareoptions vests at the end of the three-year period. On grant date, each share option has a fair value ofP15. By December 31,2011, 200 employees have left and it is expected that on the basis of aweighted average probability, a further 100 employees will leave during the vesting period. ByDecember 31,2012, 150 employees have left and it is expected that a further 50 employees will leaveduring 2013. By December 31,2013, 100 employees have left. Ten share options are needed for thepurchase of one Ordinary Shares with par value of P10 at P12 per share. On January 1,2014, allshare options are exercised.Required: A. Prepare the adjusting entry on December 31,2011, 2012 and 2013.B. Based on your audit, determine the following:____________1. Compensation…arrow_forwardCase 2On January 1, 2018, Olaf company granted share options to key employees to supplement their compensation. The options given were 200,000 ordinary shares of P10 par value at an option price of P15 per share. The market price of this share on January 1, 2018 was P20. The fair value of each share option on January 1, 2018 is P8. The options were exercisable beginning January 1, 2018 and expire on December 31, 2020. On December 31, 2018, all share options were exercised. What is the entry to record the compensation expense in 2018 and the entry to record upon exercise?arrow_forwardShare-based Compensation (Share Options) (PFRS 2)Problem 20. On January 1,2011, Smart Inc. granted 200 share options each to 1,000 employees,conditional upon the employee’s remaining in the entity’s employ during the vesting period. The shareoptions vests at the end of the three-year period. On grant date, each share option has a fair value ofP15. By December 31,2011, 200 employees have left and it is expected that on the basis of aweighted average probability, a further 100 employees will leave during the vesting period. ByDecember 31,2012, 150 employees have left and it is expected that a further 50 employees will leaveduring 2013. By December 31,2013, 100 employees have left. Ten share options are needed for thepurchase of one Ordinary Shares with par value of P10 at P12 per share. On January 1,2014, allshare options are exercised.Required: A. Prepare the adjusting entry on December 31,2011, 2012 and 2013.arrow_forward
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