Concept explainers
a.
The value of compensation expense of the company, as per IFRS.
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 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.
Want to see the full answer?
Check out a sample textbook solutionChapter 19 Solutions
Intermediate Accounting, Student Value Edition Plus MyLab Accounting with Pearson eText -- Access Card Package (2nd Edition)
- On December 31, 2016, Beckford Company issues 150,000 stock-appreciation rights to its officers entitling them to receive cash for the difference between the market price of its stock and a pre-established price of $10. The fair value of the SARs is estimated to be $4 per SAR on December 31, 2017; $1 on December 31, 2018; $10 on December 31, 2019; and $9 on December 31, 2020. The service period is 4 years, and the exercise period is 7 years. Instructions a. Prepare a schedule that shows the amount of compensation expense allocable to each year affected by the stock-appreciation rights plan. b. Prepare the entry at December 31, 2020, to record compensation expense, if any, in 2020. c. Prepare the entry on December 31, 2020, assuming that all 150,000 SARs are exercised.arrow_forwardOn 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.…arrow_forward(Stock-Appreciation Rights) Capulet 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 $30 (also market price) on December 31, 2013, on 30,000 SARs. The date of grant is December 31, 2013, and the requiredemployment (service) period is 4 years. President Davis exercises all of the SARs in 2019. The fair value of the SARs is estimated to be $6 per SAR on December 31, 2014; $9 on December 31, 2015; $15 on December 31, 2016; $6 on December 31, 2017; and $18 on December 31, 2018.Instructions(a) Prepare a 5-year (2014–2018) schedule of compensation expense pertaining to the 30,000 SARs granted president Davis.(b) Prepare the journal entry for compensation expense in 2014, 2017, and 2018 relative to the 30,000 SARs.arrow_forward
- On December 31, 2016, Wesley Inc. granted 4,000 share appreciation rights (SARs) to its employees. When exercised, each SAR paid out the current market price of the common shares less $34 (the market price of the common shares on the date of the SAR grant). The vesting period ended on December 30, 2018, and the exercise period ended on December 31, 2019. Information on Wesley Inc.'s plan is as follows: Average cash paid out on exercise Number of SARs exercised Year end Dec 31, 2016 Dec 31, 2017 Dec 31, 2018 Dec 31, 2019 Fair value per SAR $ 8 15 22 Estimated number of SARs vesting 90% 93% 92% (actual) $18 14 2,100 1,580 Required: Prepare all journal entries for the years ended December 31, 2017, through December 31, 2019, inclusive.arrow_forwardOn December 31, 2016, Wesley Inc. granted 4,000 share appreciation rights (SARS) to its employees. When exercised, each SAR paid out the current market price of the common shares less $34 (the market price of the common shares on the date of the SAR grant). The vesting period ended on December 30, 2018, and the exercise period ended on December 31, 2019. Information on Wesley Inc.'s plan is as follows: Average cash paid out on exercise Estimated Fair value per SAR number of SARS vesting Number of Year end SARS exercised $ 8 Dec 31, 2016 Dec 31, 2017 Dec 31, 2018 Dec 31, 2019 90% 15 93% 22 92% (actual) $18 2,100 14 1,580 Required: Prepare all journal entries for the years ended December 31, 2017, through December 31, 2019, inclusive. (arrow_forwardOn December 31, 2016, Wesley Inc. granted 4,000 share appreciation rights (SARS) to its employees. When exercised, each SAR paid out the current market price of the common shares less $34 (the market price of the common shares on the date of the SAR grant). The vesting period ended on December 30, 2018, and the exercise period ended on December 31, 2019. Infomation on Wesley Inc.'s plan is as follows: Average cash paid out on exercise Estimated Fair value per SAR Number of SARS exercised number of Year end SARS vesting Dec 31, 2016 Dec 31, 2017 Dec 31, 2018 Dec 31, 2019 $ 8 90% | 15 93% 22 92% (actual) $18 2,100 14 1,580 Required: Prepare all journal entries for the years ended December 31, 2017, through December 31, 2019, inclusivearrow_forward
- On January 1, 2025, Splish Corporation granted 1,800 shares of restricted-stock units. The par value of the stock is $5 per share. The market price (fair value) of the stock is $64 per share on the date of grant. The period of benefit is 2 years. Prepare Splish's journal entries for December 31, 2025 and 2026. (List all debit entries before credit entries. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter o for the amounts. Record journal entries in the order presented in the problem.) Date 12/31/25 12/31/26 2/31/26 Account Titles and Explanation Unearned Compensation Paid-in Capital in Excess of Par-Common Stock Compensation Expense Unearned Compensation (To record compensation expense) Compensation Expense Debit 0000 Creditarrow_forwardOn January 1, 2025, Splish Corporation granted 1,800 shares of restricted-stock units. The par value of the stock is $5 per share. The market price (fair value) of the stock is $64 per share on the date of grant. The period of benefit is 2 years. Prepare Splish's journal entries for December 31, 2025 and 2026. (List all debit entries before credit entries. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter o for the amounts. Record journal entries in the order presented in the problem.) Date 12/31/25 12/31/26 12/31/26 12/31/25 12/31/26 12/31/26 Account Titles and Explanation Unearned Compensation Paid-in Capital in Excess of Par - Common Stock Compensation Expense Unearned Compensation (To record compensation expense) Compensation Expense Unearned Compensation Paid-in Capital in Excess of Par - Common Stock Compensation Expense Unearned Compensation (To record…arrow_forwardOn December 31, 2021, Swifty Company issues 124,000 stock-appreciation rights to its officers entitling them to receive cash for the difference between the market price of its stock and a pre-established price of $10. The fair value of the SARS is estimated to be $5 per SAR on December 31, 2022; $2 on December 31, 2023; $10 on December 31, 2024; and $9 on December 31, 2025. The service period is 4 years, and the exercise period is 7 years. (a) Prepare a schedule that shows the amount of compensation expense allocable to each year affected by the stock-appreciation rights plan. (If the compensation decreases from prior year enter the amount as a negative number in the table e.g.-25,000 or (25,000).) Date Fair Value 12/31/22 $ 12/31/23 12/31/24 12/31/25 Cumulative Compensation Recognizable +A $ Percentage Accrued % % % %arrow_forward
- At December 31, 2019, Wayne Company owned note payable of P1,950,000, due March 15, 2020. Wayne expects to retire this debt with proceeds from the sale of 200,00o shares of its share capital. The shares were sold for P10 per share on March 1, 2020, prior to the issuance of the year-end financial statements. In Wayne's December 31, 2019 Statement of Financial Position, what amount of the note payable should be excluded from current liabilities?arrow_forwardOn December 31, 2021, Skysong Company issues 139,000 stock-appreciation rights to its officers entitling them to receive cash for the difference between the market price of its stock and a pre-established price of $11. The fair value of the SARS is estimated to be $5 per SAR on December 31, 2022; $2 on December 31, 2023; $11 on December 31, 2024; and $9 on December 31, 2025. The service period is 4 years, and the exercise period is 7 years. (a) Prepare a schedule that shows the amount of compensation expense allocable to each year affected by the stock-appreciation rights plan. (If the compensation decreases from prior year enter the amount as a negative number in the table e.g. -25,000 or (25,000).) Date 12/31/22 12/31/23 12/31/24 $ Fair Value 11 Cumulative Compensation Recognizable $ 11 Percentage Accrued % S % %arrow_forwardOn December 31, 2021, Coronado Company issues 128,000 stock-appreciation rights to its officers entitling them to receive cash for the difference between the market price of its stock and a pre-established price of $9. The fair value of the SARS is estimated to be $4 per SAR on December 31, 2022; $1 on December 31, 2023; $9 on December 31, 2024; and $7 on December 31, 2025. The service period is 4 years, and the exercise period is 7 years. (a) Your answer is partially correct. Prepare a schedule that shows the amount of compensation expense allocable to each year affected by the stock-appreciation rights plan. (If the compensation decreases from prior year enter the amount as a negative number in the table e.g. -25,000 or (25,000).) Date 12/31/22 12/31/23 12/31/24 12/31/25 $ Fair Value 4 ||| Cumulative Compensation Recognizable $ 512,000 128,000 1,152,000 896,000 Percentage Accrued 25 % 50 % 75 % 100 % $ $ Compensation Accrued to Date 128,000 256,000 64,000 -64,000 864,000 -800,000…arrow_forward
- AccountingAccountingISBN:9781337272094Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.Publisher:Cengage Learning,Accounting Information SystemsAccountingISBN:9781337619202Author:Hall, James A.Publisher:Cengage Learning,
- Horngren's Cost Accounting: A Managerial Emphasis...AccountingISBN:9780134475585Author:Srikant M. Datar, Madhav V. RajanPublisher:PEARSONIntermediate AccountingAccountingISBN:9781259722660Author:J. David Spiceland, Mark W. Nelson, Wayne M ThomasPublisher:McGraw-Hill EducationFinancial and Managerial AccountingAccountingISBN:9781259726705Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting PrinciplesPublisher:McGraw-Hill Education