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Q: The owners are desirous of comparing serval financial transactions and possible outcomes to assist…
A: The journal book is a place where transactions are recorded in the form of journal entries.
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A: Step 1: ClassNo of sharesVote entitlementTotal VoteFounder Family SharesClass A52,3258418,600Normal…
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Q: Microsoft provides compensation to executives in the form of a variety of incentive compensation…
A: Answer:- Compensation expenses refer to the cost incurred by a company for paying its employees and…
Q: Microsoft provides compensation to executives in the form of a variety of incentive compensation…
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Q: decision-making process. They assume that the company will be formed on January 1, 2020. In…
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A: The journal entries are prepared to keep the record of day to day transactions of the business.
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Arts Corporation offers a generous employee compensation package that includes employee stock options. The exercise price has always been equal to the market price of the stock at the date of grant. The corporate controller, John Jones, believes that employee stock options, like all obligations to issue the corporation's own stock, are equity. The new staff accountant, Marcy Means, disagrees. Marcy argues that when a company issues stock for less than current value, the value of preexisting stockholders' shares is diluted.
Pretend you are hired to debate the issues of the proper treatment of opinions written on a company's own stock. Formulate your argument, citing concepts and definitions to buttress your case, assuming:
i. You are siding with John
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- On October 1, 2016, Farmer Fabrication issued stock options for 100,000 shares to a division manager. The options have an estimated fair value of $6 each. To provide additional incentive for managerial achievement, the options are not exercisable unless Farmer Fabrication’s stock price increases by 5% in three years. Farmer initially estimates that it is not probable the goal will be achieved. How much compensation will be recorded in each of the next three years?The following two items appeared on the Internet concerning the GAAP requirement to expense stock options. WASHINGTON, D.C.—February 17, 2005 Congressman David Dreier (R–CA), Chairman of the House Rules Committee, and Congresswoman Anna Eshoo (D–CA) reintroduced legislation today that will preserve broad-based employee stock option plans and give investors critical information they need to understand how employee stock options impact the value of their shares. "Last year, the U.S. House of Representatives overwhelmingly voted for legislation that would have ensured the continued ability of innovative companies to offer stock options to rank-and-file employees," Dreier stated. "Both the Financial Accounting Standards Board (FASB) and the Securities and Exchange Commission (SEC) continue to ignore our calls to address legitimate concerns about the impact of FASB's new standard on workers' ability to have an ownership stake in the New Economy, and its failure to address the real need of…Microsoft provides compensation to executives in the form of a variety of incentive compensation plans, including restricted stock award grants. The following is an excerpt from a disclosure note from Microsoft's 2020 annual report: Note 18 Employee Stock and Savings Plans (in part) Stock awards entitle the holder to receive shares of Microsoft common stock as the award vests. Stock awards generally vest over a five-year period.... During fiscal year 2020, the following activity occurred under our plans: Stock awards: Nonvested balance, beginning of year. Granted Vested Forfeited Nonvested balance, end of year Shares (in) millions) 147 53 (65) (9) Compensation expense in fiscal 2020 126 Weighted Average Grant-Date Fair Value $78.49 140.49 75.35 90.30 $ 105.23 Required: If all awards are granted, acquired, vested, and forfeited evenly throughout the year, what is the compensation expense in fiscal 2020 pertaining to the previous and current stock awards? Assume forfeited shares were…
- Microsoft provides compensation to executives in the form of a variety of incentive compensation plans, including restricted stock award grants. The following is an excerpt from a disclosure note from Microsoft's 2020 annual report Note 18 Employee Stock and Savings Plans (in part) Stock awards entitle the holder to receive shares of Microsoft common stock as the award vests. Stock awards generally vest over a five-year period... During fiscal year 2020, the following activity occurred under our plans: Stock awards: Nonvested balance, beginning of year Granted Vested Forfeited Nonvested balance, end of year Shares (in millions) 147 53 (65) 126 Weighted Average Grant-Date Fair Value $ 78.49 140,49 75.35 90.30 $ 105.23 Required: If all awards are granted, acquired, vested, and forfeited evenly throughout the year, what is the compensation expense in fiscal 2020 pertaining to the previous and current stock awards? Assume forfeited shares were granted evenly throughout the three previous…The following events occurred regarding the company's executive compensation plan. 2. On 1/1/x4, the stockholders adopted a stock option plan for top executives whereby each might receive rights to purchase up to 20,000 shares of common stock at $40 per share. The par value is $10 per share. 3. On 2/1/x4, options were granted to each of five executives to purchase 20,000 shares. The options were non-transferable and the executive had to remain an employee of the company to exercise the option. The options expire on 2/1/x6. It is assumed that the options were for services performed equally in 20x4 and 20x5. The Black-Scholes option pricing model determines total compensation expense to be $2,100,000. 3. At 2/1/x6, four executives exercised their options. The fifth executive chose not to exercise his options, which therefore were forfeited Prepare the journal entries for 2/1/x64. Why do companies give stock-based compensation (e.g. stock options) to employee? Please describe some examples of stock- based compensations.
- Stock dividends and stock splits are similar in that both do not change total stockholders’ equity. (True/False) A company must accrue a liability for sick pay that accumulates but does not vest. (True/False) A company may exclude a short-term obligation from current liabilities if the firm can demonstrate an ability to complete a refinancing. (True/False) Federal income taxes should be included in an employer’s payroll tax expense. (True/False) Whether an employee earns $80,000 a year or $800,000 a year, all of the earnings will be subject to Medicare deductions. (True/False) To record compensated absences as a liability GAAP establishes four criteria. The employer needs to meet any two of these four criteria in order to recognize a liability for compensated absences. (True/False) Stock dividends and stock splits both cause the number of shares outstanding to increase and retained earnings to decrease. (True/False)You are assistant controller of Stamos & Company, a medium-size manufacturer of machine parts. On October 22, 2015, the board of directors approved a stock option plan for key executives. On January 1, 2016, a specific number of stock options were granted. The options were exercisable between January 1, 2018, and December 31, 2022, at 100% of the quoted market price at the grant date. The service period is for 2016 through 2018. Your boss, the controller, is one of the executives to receive options. Neither he nor you have had occasion to deal with GAAP on accounting for stock options. He and you are aware of the traditional approach your company used years ago but do not know the newer method. Your boss understands how options might benefit him personally but wants to be aware also of how the options will be reported in the financial statements. He has asked you for a one-page synopsis of accounting for stock options under the fair value approach. He instructed you, “I don’t care…Richardson Company is contemplating the establishment of a share-based compensation plan to provide long-run incentives for its top management. However, members of the compensation committee of the board of directors have voiced some concerns about adopting these plans, based on news accounts related to a recent accounting standard in this area. They would like you to conduct some research on this recent standard so they can be better informed about the accounting for these plans.InstructionsIf your school has a subscription to the FASB Codification, go to http://aaahq.org/ascLogin.cfm to log in and prepare responses tothe following. Provide Codification references for your responses. (a) Identify the authoritative literature that addresses the accounting for share-based payment compensation plans.(b) Briefly discuss the objectives for the accounting for stock compensation. What is the role of fair value measurement?(c) The Richardson Company board is also considering an employee…
