Intermediate Accounting Plus Mylab Accounting With Pearson Etext -- Access Card Package (2nd Edition)
2nd Edition
ISBN: 9780134833101
Author: Elizabeth A. Gordon, Jana S. Raedy, Alexander J. Sannella
Publisher: PEARSON
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Question
Chapter 19, Problem 19.6E
a.
To determine
The value of compensation expense of the company.
Giveninformation:
Number of shares granted as SARs is 200,000.
Vesting period is 3 years.
Pre-established price at the beginning of the year is $55.
Fair value of SAR as on December 31, 2018 is $7.
Fair value of SAR as on December 31, 2019 is $13.
Fair value of SAR as on December 31, 2020 is $11.
b.
To determine
To prepare: The
Given information:
Number of shares granted as SARs is 200,000
Vesting period is 3 years.
Pre-established price at the beginning of the year is $55.
Fair value of SAR as on December 31, 2018 is $7.
Fair value of SAR as on December 31, 2019 is $13.
Fair value of SAR as on December 31, 2020 is $11.
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Ferraro, Inc. established a stock-appreciation rights (SARs) program on January 1, 2020, which entitles executives to receive cash at the date of exercise for the difference between the market price of the stock and the pre-established price of $20 on 5,000 SARs. The required service period is 2 years. The fair value of the SARs are determined to be $4 on December 31, 2020, and $9 on December 31, 2021. Compute Ferraro's compensation expense for 2020 and 2021.
On January 1, 2018 Weins Inc. granted 100,000 stock appreciation rights (SARs) to its executives. (Weins Inc uses IFRS)
Each SAR entitled its holder to receive cash equal to the difference between the market price of the common share and the benchmark price of $12.
The SARs vested after two years and expired on Dec. 31, 2021.
On January 1, 2020, 10,000 SARs are exercised. The market price of the shares remained at $22.
On January 1, 2021, 50,000 SARS are exercised. The market price of the shares remained at $15
The remaining SARs expired on December 31, 2021
Pertinent stock-related data are listed below:
Date
Fair value each SAR
Market price of share
1-Jan-18
$11
31-Dec-18
$7
$15
31-Dec-19
$6
$14
31-Dec-20
$8
$22
31-Dec-21
$5
$15
Required: Prepare journal entries for the following:
December 31, 2018, to record compensation expense.
December 31, 2019, to record compensation expense.
December 31, 2020, to record compensation expense.…
Concord Company establishes a stock-appreciation rights program that entitles its new president Ben Davis to receive cash for the
difference between the market price of the stock and a pre-established price of $33 (also market price) on December 31, 2021,
on 37,700 SARs. The date of grant is December 31, 2021, and the required employment (service) period is 4 years. President Davis
exercises all of the SARS in 2027. The fair value of the SARS is estimated to be $6 per SAR on December 31, 2022; $10 on December
31, 2023; $14 on December 31, 2024; $6 on December 31, 2025; and $17 on December 31, 2026.
(a)
Prepare a 5-year (2022-2026) schedule of compensation expense pertaining to the 37,700 SARS granted president Davis. (If the
compensation decreases from prior year enter the amount as a negative number in the table eg -25,000 or (25,000))
Cumulative Compensation
Recognizable
Date
12/31/22 $
12/31/23
12/31/24
12/31/25
Fair Value
Percentage Accrued
%
$
Compens
Chapter 19 Solutions
Intermediate Accounting Plus Mylab Accounting With Pearson Etext -- Access Card Package (2nd Edition)
Ch. 19 - What is the allocation period used to expense...Ch. 19 - How do companies account for stock-based...Ch. 19 - Do companies with equity-based compensation plans...Ch. 19 - When accounting for employee stock options, will a...Ch. 19 - Prob. 19.5QCh. 19 - Prob. 19.6QCh. 19 - Prob. 19.7QCh. 19 - Prob. 19.8QCh. 19 - Prob. 19.9QCh. 19 - Prob. 19.10Q
Ch. 19 - Prob. 19.1MCCh. 19 - Prob. 19.2MCCh. 19 - Prob. 19.3MCCh. 19 - Prob. 19.4MCCh. 19 - Prob. 19.5MCCh. 19 - Prob. 19.6MCCh. 19 - Prob. 19.7MCCh. 19 - Prob. 19.8MCCh. 19 - Prob. 19.1BECh. 19 - Prob. 19.2BECh. 19 - Prob. 19.3BECh. 19 - Prob. 19.4BECh. 19 - Prob. 19.5BECh. 19 - Prob. 19.6BECh. 19 - Employee Stock Options, Liability-Classified...Ch. 19 - Prob. 19.8BECh. 19 - Prob. 19.12BECh. 19 - Prob. 19.13BECh. 19 - Prob. 19.14BECh. 19 - Prob. 19.15BECh. 19 - Prob. 19.16BECh. 19 - Prob. 19.17BECh. 19 - Prob. 19.18BECh. 19 - Prob. 19.19BECh. 19 - Prob. 19.20BECh. 19 - Prob. 19.21BECh. 19 - Prob. 19.22BECh. 19 - Prob. 19.23BECh. 19 - Prob. 19.24BECh. 19 - Prob. 19.25BECh. 19 - Prob. 19.26BECh. 19 - Prob. 19.27BECh. 19 - Prob. 19.28BECh. 19 - Prob. 19.1ECh. 19 - Prob. 19.2ECh. 19 - Employee Stock Options. Equity-Classified Awards....Ch. 19 - Prob. 19.4ECh. 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 - Prob. 19.13ECh. 19 - Prob. 19.14ECh. 19 - Prob. 19.15ECh. 19 - Prob. 19.1PCh. 19 - Prob. 19.2PCh. 19 - Prob. 19.3PCh. 19 - Prob. 19.5PCh. 19 - Prob. 19.6PCh. 19 - Prob. 19.7PCh. 19 - Prob. 19.8PCh. 19 - Prob. 19.9PCh. 19 - Prob. 19.10PCh. 19 - Prob. 19.11PCh. 19 - Prob. 19.12PCh. 19 - Prob. 1JCCh. 19 - Prob. 1FSCCh. 19 - Prob. 2FSCCh. 19 - Prob. 1SSCCh. 19 - Prob. 2SSCCh. 19 - Basis for Conclusions Case 1: Are Employee Stock...Ch. 19 - Prob. 2BCC
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