44 Corporation A offers to issue additional shares of common stock in five years to Corporation B. The issuance of stock is contingent on Corporation B achieving minimum earnings. Corporation B meets theearnings requirement in the first quarter of Year Two.Which action will Corporation A take once the contingent earnings have been achieved?O Corporation A will not include the number of contingent shares in its earnings per share calculation.Corporation A will report its basic earnings per share and issue the shares to Corporation B.O Corporation A will include the number of contingent shares in its earnings per share calculation.Corporation A will include a proportionate number of shares of the contingent shares in its earnings per share calculation.

Contingent Shares and Earnings Per Share (EPS):When contingent shares become issuable because the…

Answered: 44 Corporation A offers to issue…

SWFT Essntl Tax Individ/Bus Entities 2020

23rd Edition

ISBN:9780357391266

Author:Nellen

Publisher:Nellen

Chapter13: Corporations: Earning & Profits And Distributions

Section: Chapter Questions

Problem 29P

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39 On January 3 of Year 1, a company's shareholders vote to approve the issuance f stock options to an executive with an expected benefit period of three years, ending on December 31 of Year 3. On April 1 of Year 1, the company grants the options which may be exercised any time for a period of five years. The company uses the fair value method, and the executive exercises the stock options on October 1 of Year 3. On which date is the fair value amount used to calculate the company's compensation expense for this executive? O October 1 of Year 3 April 1 of Year 1 O December 31 of Year 3 O January 3 of Year 1 NEXT > BOOKMARK
7. What amount should BLACK WIDOW charge to compensation expense for the year December 31, 2023 as a result of the share appreciation right? * On January 1, 2021, BLACK WIDOW Company offered its top management share appreciation right with the following terms: Predetermined price Number of shares P 100 per share 50,000 shares Service period 3 years Exercise date January 1, 2024 The share appreciation right is to be exercised on January 1, 2024. The quoted prices per share are P100, 124, 151 and 151 on January 1, 2021, December 31, 2021, December 31, 2022, December 31, 2023, respectively.
7. What amount should BLACK WIDOW charge to compensation expense for the year December 31, 2023 as a result of the share appreciation right?
Cc.72.
22. A company grants 100 Share appreciation rights (SAR), payable in cash, to an employee on 1/1/Y1. The predetermined amount for the SAR plan is P50 per right, and the market value of the stock is P55 on 12/31/Y1, P53 on 12/31/Y2, and P61 on 12/31/Y3. Liability on SAR at the end of year 2 is?
Problem 22. On January 1, 2015, WAY Inc. granted 100 share options to its 500 employees. The share options are subject to the condition that the employees must remain to the company for a period of 3 years. The share option is not traded at the stock market. Each share option entitles the holder to acquire one ordinary share with P2 par value for P5 per share. The ordinary shares of WAY Inc. which are listed at the stock market are trading at the following prices: 12/31/2015 – P8; 12/31/2016 – P7; 12/31/2017 – P10. As of December 31, 2015, 80 employees have left and the company estimated based on weighted average probability that 20 employees will leave during the vesting period. As of December 31, 2016, 40 employees have left and the company estimated based on weighted average probability that 30 employees will leave during the vesting period. As of December 31, 2017, 130 employees have left. On January 1, 2018, all share options are exercised. Required: Determine the…
On August 1, 2021, Comical Company issued rights to stockholders to subscribe to additional share of its common stock. A stockholder can buy one new share for every 5 rights plus P25 cash. The rights will expire on October 1, 2021. On July 31, 2021, the market price of a share with the right attached was P50, while the market price of the right alone was P5. Comical’s equity on July 31, 2021, comprised of the following: Ordinary Shares, P10 par P4,000,000 Subscribed ordinary shares 1,000,000 Share premium 600,000 Retained earnings 200,000 Treasury shares, 80,000 shares 1,750,000 What is the effect on the…
On August 1, 2021, Comical Company issued rights to stockholders to subscribe to additional share of its common stock. A stockholder can buy one new share for every 5 rights plus P25 cash. The rights will expire on October 1, 2021. On July 31, 2021, the market price of a share with the right attached was P50, while the market price of the right alone was P5. Comical’s equity on July 31, 2021, comprised of the following: Ordinary Shares, P10 par P4,000,000 Subscribed ordinary shares 1,000,000 Share premium 600,000 Retained earnings 200,000 Treasury shares, 80,000 shares 1,750,000 What is the effect on the stockholders’ equity as a result of the issuance of stock rights? no change 2,500,000 increase 500,000 increase 200,000 increase What is the…
On August 1, 2021, Comical Company issued rights to stockholders to subscribe to additional share of its common stock. A stockholder can buy one new share for every 5 rights plus P25 cash. The rights will expire on October 1, 2021. On July 31, 2021, the market price of a share with the right attached was P50, while the market price of the right alone was P5. Comical's equity on July 31, 2021, comprised of the following: Ordinary Shares, P10 par P4,000,000 Subscribed ordinary shares 1,000,000 Share premium 600,000 Retained earnings 200,000 Treasury shares, 80,000 shares 1,750,000 What is the effect on the stockholders' equity if all but 60,000 share rights were exercised? 1,300,000 increase 1,800,000 increase 2,100,000 increase no change What is the effect on the stockholders' equity as a results of the issuance of stock rights? 200,000 increase no change…
Problem 24. On January 1, 2015, ID Inc. granted to an employee the right to choose either: a. 12,000 share (Share or Equity Alternative) (Share options) b. Cash payment equal to market value of 10,000 shares (Cash Alternative) (Share appreciation rights) The grant is conditional upon the completion of three years of service. If the employee chooses the share alternative, the shares must be held for three years after vesting date. The par value of the shares is P25 and at grant date on January 1, 2015, the share price is P51. The share prices for the three-year vesting period are P54 on December 31, 2015, P60 on December 31, 2016 and P65 on December 31, 2017. After taking into account the effects of post-vesting restrictions, the entity has estimated that the fair value of the share or equity alternatives is P48 per share. Required: Based on the result of your audit, determine the following: 1. Compensation expense for year 2015 2. Compensation expense for year 2016 3. Compensation…
Problem 24. On January 1, 2015, ID Inc. granted to an employee the right to choose either:a. 12,000 share (Share or Equity Alternative) (Share options)b. Cash payment equal to market value of 10,000 shares (Cash Alternative) (Share appreciation rights)The grant is conditional upon the completion of three years of service. If the employee chooses the share alternative, the shares must be held for three years after vesting date.The par value of the shares is P25 and at grant date on January 1, 2015, the share price is P51.The share prices for the three-year vesting period are P54 on December 31, 2015, P60 on December 31, 2016 and P65 on December 31, 2017.After taking into account the effects of post-vesting restrictions, the entity has estimated that the fair value of the share or equity alternatives is P48 per share.Required: Based on the result of your audit, determine the following:__________1. Compensation expense for year 2015__________2. Compensation expense for year…

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