INTERMEDIATE ACCT VOL.2>CUSTOM<
9th Edition
ISBN: 9781307165067
Author: SPICELAND
Publisher: MCG/CREATE
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Chapter 19, Problem 19.4E
(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 determine
To prepare:
(3)
To determine
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 determine
The new compensation cost of RSUs, if 10% of shares are forfeited
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qw.128.
On January 1, 2021, Adams-Meneke Corporation granted 60 million incentive stock options to division managers, each permitting holders to purchase one share of the company’s $1 par common shares within the next six years, but not before December 31, 2023 (the vesting date). The exercise price is the market price of the shares on the date of grant, currently $16 per share. The fair value of the options, estimated by an appropriate option pricing model, is $3 per option. Management’s
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This problem is a variation of P 12–10 focusing on the fair value option.]On January 4, 2018, Runyan Bakery paid $324 million for 10 million shares of Lavery Labeling Companycommon stock. The investment represents a 30% interest in the net assets of Lavery and gave Runyan the abilityto exercise significant influence over Lavery’s operations. Runyan chose the fair value option to account forthis investment. Runyan received dividends of $2.00 per share on December 15, 2018, and Lavery reported netincome of $160 million for the year ended December 31, 2018. The market value of Lavery’s common stock atDecember 31, 2018, was $31 per share. On the purchase date, the book value of Lavery’s net assets was $800million and:a. The fair value of Lavery’s depreciable assets, with an average remaining useful life of six years, exceededtheir book value by $80 million.b. The remainder of the excess of the cost of the investment over the book value of net assets purchased wasattributable to…
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.
Chapter 19 Solutions
INTERMEDIATE ACCT VOL.2>CUSTOM<
Ch. 19 - Prob. 19.1QCh. 19 - Prob. 19.2QCh. 19 - The Tax Code differentiates between qualified...Ch. 19 - Stock option (and other share-based) plans often...Ch. 19 - What is a simple capital structure? How is EPS...Ch. 19 - Prob. 19.6QCh. 19 - Blake Distributors had 100,000 common shares...Ch. 19 - Why are preferred dividends deducted from net...Ch. 19 - Prob. 19.9QCh. 19 - The treasury stock method is used to incorporate...
Ch. 19 - The potentially dilutive effect of convertible...Ch. 19 - How is the potentially dilutive effect of...Ch. 19 - Prob. 19.13QCh. 19 - If stock options and restricted stock are...Ch. 19 - Wiseman Electronics has an agreement with certain...Ch. 19 - Prob. 19.16QCh. 19 - When the income statement includes discontinued...Ch. 19 - Prob. 19.18QCh. 19 - Prob. 19.19QCh. 19 - (Based on Appendix B) LTV Corporation grants SARs...Ch. 19 - Prob. 19.1BECh. 19 - Prob. 19.2BECh. 19 - Stock options LO192 Under its executive stock...Ch. 19 - Prob. 19.4BECh. 19 - Prob. 19.5BECh. 19 - Prob. 19.6BECh. 19 - Prob. 19.7BECh. 19 - Prob. 19.8BECh. 19 - Prob. 19.9BECh. 19 - Performance-based options LO192 Refer to the...Ch. 19 - Prob. 19.11BECh. 19 - Prob. 19.12BECh. 19 - EPS; nonconvertible preferred shares LO197 At...Ch. 19 - Prob. 19.14BECh. 19 - Prob. 19.15BECh. 19 - Prob. 19.16BECh. 19 - Prob. 19.1ECh. 19 - Prob. 19.2ECh. 19 - Prob. 19.3ECh. 19 - Prob. 19.4ECh. 19 - Prob. 19.5ECh. 19 - Prob. 19.6ECh. 19 - Prob. 19.7ECh. 19 - Prob. 19.8ECh. 19 - Prob. 19.9ECh. 19 - Prob. 19.10ECh. 19 - Prob. 19.11ECh. 19 - EPS; shares issued; stock dividend LO195, LO196...Ch. 19 - Prob. 19.13ECh. 19 - EPS; stock dividend; nonconvertible preferred...Ch. 19 - EPS; net loss; nonconvertible preferred stock;...Ch. 19 - EPS; stock dividend; nonconvertible preferred...Ch. 19 - Prob. 19.17ECh. 19 - EPS; stock dividend; nonconvertible preferred...Ch. 19 - EPS; stock dividend; nonconvertible preferred...Ch. 19 - EPS; shares issued; stock options LO196 through...Ch. 19 - EPS; convertible preferred stock; convertible...Ch. 19 - Prob. 19.22ECh. 19 - Prob. 19.23ECh. 19 - Prob. 19.24ECh. 19 - Prob. 19.25ECh. 19 - EPS; concepts; terminology LO195 through LO1913...Ch. 19 - FASB codification research LO192 The FASB...Ch. 19 - Prob. 19.28ECh. 19 - Prob. 19.29ECh. 19 - Prob. 19.30ECh. 19 - Restricted stock units; cash settlement Appendix...Ch. 19 - Stock options; forfeiture; exercise LO192 On...Ch. 19 - Stock options; graded vesting LO192 January 1,...Ch. 19 - Stock options; graded vesting; measurement using a...Ch. 19 - Stock options; graded vesting; IFRS LO192, LO1914...Ch. 19 - Prob. 19.5PCh. 19 - Prob. 19.6PCh. 19 - Prob. 19.7PCh. 19 - Prob. 19.8PCh. 19 - EPS from statement of retained earnings LO194...Ch. 19 - EPS from statement of shareholders equity LO194...Ch. 19 - EPS; non convertible preferred stock; treasury...Ch. 19 - EPS; non convertible preferred stock; treasury...Ch. 19 - EPS; non convertible preferred stock; treasury...Ch. 19 - EPS; convertible preferred stock; convertible...Ch. 19 - EPS; antidilution LO194 through LO1910, LO1913...Ch. 19 - EPS; convertible bonds; treasury shares LO194...Ch. 19 - Prob. 19.17PCh. 19 - Prob. 19.18PCh. 19 - EPS; options; restricted stock; additional...Ch. 19 - Prob. 19.1BYPCh. 19 - Communication Case 192 Stock options; basic...Ch. 19 - Prob. 19.3BYPCh. 19 - Real World Case 195 Share-based plans; Walmart ...Ch. 19 - Prob. 19.6BYPCh. 19 - Prob. 19.7BYPCh. 19 - Analysis Case 198 EPS concepts LO194 through...Ch. 19 - Prob. 19.9BYPCh. 19 - Prob. 19.10BYPCh. 19 - Communication Case 1911 Dilution LO199 I thought...Ch. 19 - Real World Case 1912 Reporting EPS; discontinued...Ch. 19 - Analysis Case 1913 Analyzing financial statements;...Ch. 19 - Analysis Case 1915 Kelloggs EPS; PE ratio;...Ch. 19 - Prob. 19.16BYPCh. 19 - Prob. 1CCTCCh. 19 - Air FranceKLM Case IFRS LO199 Air FranceKLM (AF),...
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