GEN COMBO LOOSELEAF INTERMEDIATE ACCOUNTING; CONNECT ACCESS CARD
9th Edition
ISBN: 9781260089042
Author: J. David Spiceland
Publisher: McGraw-Hill Education
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Chapter 19, Problem 19.4P
Stock options; graded vesting; IFRS
• LO19–2, LO19–14
IFRS
Refer to the situation described in P 19–2. Assume Pastner prepares its financial statements using International Financial Reporting Standards (IFRS).
Required:
How might your responses to requirement 1 and requirement 2 differ using IFRS? Explain.
P 19–2
Stock options; graded vesting
• LO19–2
January 1, 2018, the company issued 400,000 executive stock options permitting executives to buy 400,000 shares of Pastner stock for $34 per share. One-fourth of the options vest in each of the next four years beginning at December 31, 2018 (graded vesting). Pastner elects to separate the total award into four groups (or tranches) according to the year in which they vest and measures the compensation cost for each vesting date as a separate award. The fair value of each tranche is estimated at January 1, 2018, as follows:
| Vesting Date | Amount Vesting Fair | Value per Option |
| Dec. 31, 2018 | 25% | $3.50 |
| Dec. 31, 2019 | 25% | $4.00 |
| Dec. 31, 2020 | 25% | $4.50 |
| Dec. 31, 2021 | 25% | $5.00 |
Required:
1. Determine the compensation expense related to the options to be recorded each year 2018–2021, assuming Pastner allocates the compensation cost for each of the four groups (tranches) separately.
2. Determine the compensation expense related to the options to be recorded each year 2018–2021, assuming Pastner uses the straight-line method to allocate the total compensation cost.
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Amalgamated General Corporation is a consulting firm that also offers financial services through its credit division. From time to time the company buys and sells securities. The following selected transactions relate to Amalgamated's investment activities during the last quarter of 2021 and the first month of 2022. The only securities held by Amalgamated at October 1, 2021 were $32 million of 10% bonds of Kansas Abstractors, Inc. purchased on May 1, 2021 at face value and held in Amalgamated's trading securities portfolio. The company's fiscal year ends on December 31.
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Problem 12-9 (Algo) Securities held-to-maturity; trading securities and equity investments [LO12-1, 12-2, 12-3, 12-5]
Amalgamated General Corporation is a consulting firm that also offers financial services through its credit division. From time to time the company buys and sells securities. The following selected transactions relate to Amalgamated’s investment activities during the last quarter of 2021 and the first month of 2022. The only securities held by Amalgamated at October 1, 2021 were $62 million of 10% bonds of Kansas Abstractors, Inc., purchased on May 1, 2021 at face value and held in Amalgamated’s trading securities portfolio. The company’s fiscal year ends on December 31.
2021
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Purchased 2 million shares of Millwork Ventures Company common stock for $63 million. Millwork has a total of 62 million shares issued.
31
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Exercise 19-2O (Algo) EPS; shares issued; stock options [LO19-6, 19-7, 19-8, 19-9]
Stanley Department Stores reported net income of $776,000 for the year ended December 31, 2021.
Additional Information:
Common shares outstanding
Incentive stock options (vested in 2020) outstanding throughout 2021
(Each option is exercisable for one common share at an exercise price of $23.00)
During the year, the market price of Stanley's common stock averaged $27.60 per share.
On Aug. 30, Stanley sold 15,000 common shares.
Stanley's only debt consisted of $36, 000 of 10% short-term bank notes.
The company's income tax rate is 25%.
Jan. 1, 2021
90,000
24,000
Required:
Compute Stanley's basic and diluted earnings per share for the year ended December 31, 2021. (Enter your answers in thousands. Do
not round intermediate calculations)
Numerator
Denominator
Earnings per Share
Basic
%3D
Diluted
%3D
Chapter 19 Solutions
GEN COMBO LOOSELEAF INTERMEDIATE ACCOUNTING; CONNECT ACCESS CARD
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