INTERMEDIATE ACCOUNTING(LL)-W/CONNECT
9th Edition
ISBN: 9781260216141
Author: SPICELAND
Publisher: MCG CUSTOM
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Textbook Question
Chapter 19, Problem 19.5BYP
Real World Case 19–5
Share-based plans; Walmart
• LO19–1, LO19–2
Real World Financials
Walmart offers its employees a variety of share-based compensation plans including stock options, performance share awards, restricted stock, and restricted stock units. The following is an excerpt from a disclosure note from Walmart’s 2015 financial statements:
Share-Based Compensation
The Company has awarded share-based compensation to associates and nonemployee directors of the Company. The compensation expense recognized for all plans was $448 million, $462 million and $388 million for fiscal 2016, 2015 and 2014, respectively. Share-based compensation expense is included in operating, selling, general and administrative expenses in the Company’s Consolidated Statements of Income. The total income tax benefit recognized for share-based compensation was $151 million, $173 million and $145 million for fiscal 2016, 2015 and 2014, respectively. The following table summarizes the Company’s share-based compensation expense by award type:
Required:
1. Walmart’s share-based compensation includes stock options, restricted stock units, restricted stock awards, and performance-based awards. What is the general financial reporting objective when recording compensation expense for these forms of compensation?
2. Walmart reported share-based expense of $448 million in 2015. Without referring to specific numbers and ignoring other forms of share-based compensation, describe how this amount reflects the value of stock options.
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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…
Q21
An investor is generally considered to have significant influence in the investee under which of the following conditions?
Select one:
a. The investor has more than 50% of the voting power in the associate.
b. The investor has more than 20% of the voting power in the associate but does not have more than 50%.
c. The investor has less than 20% of the voting power of the associate.
d. The investor owns part of the share capital of an associate whether or not there are voting rights attached to the shareholding.
Editing
31
4
Question 3
E16.12 (LO 3) (Issuance, Exercise, and Forfeiture of Share Options) On January 1, 2022,
Magilla SA granted share options to officers and key employees for the purchase of 20,000 of the
company's C10 par ordinary shares at €25 per share. The options were exercisable by grantees still
in the employ of the company within a 5-year period, beginning January 1, 2024, and ending
December 31, 2028. The service period for this award is 2 years. Assume that the fair value option-
pricing model determines total compensation expense to be €400,00o.
On April 1, 2023, 3,000 options were forfeited when the employees resigned from the company.
The market price of the ordinary shares was C35 per share on this date.
On March 31, 2024, 12,000 options were exercised when the market price of the ordinary shares
was C40 per share.
Instructions
Prenare iournal entries ton record issuance of the share options, forfeiture of the share options,
Chapter 19 Solutions
INTERMEDIATE ACCOUNTING(LL)-W/CONNECT
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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