Case 15-11Accounting for Employee Stock Option Plans (ESOPs)Growth Corporation offered the following stock option plan to its employees: Each employee will receive 1,000 opticstock at an option price equal to the market price of the company's common shares on the grant date, January 1, 20The market price per share was $22The fair value of an option was $3Required:a. Describe how the ESOPS would have been reported under the provisions of APB Opinion No. 25.b. Analyze and explain the consequences of the APB Opinion No. 25 accounting treatment. Your analysis should ci. The conceptual frameworkii. Any ethical implicationsiii. The impact on financial statementsiv. The impact on financial ratiosc. The FASB now requires companies to use the fair value method of accounting for ESOPs as described in FASBthe ESOPS will be reported under this method.d. Analyze and explain the consequences of using fair value to measure and report the ESOPs. Your analysis shoui. The conceptual frameworkii. Any ethical implicationsiii. The impact on financial statementsiv. The impact on financial ratios

Step 1:a. Under APB Opinion No. 25, Employee Stock Ownership Plans (ESOPs) were typically reported…

Answered: Case 15-11 Accounting for Employee…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

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Chapter1: Financial Statements And Business Decisions

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Problem 16-03 Novak Company adopted a stock-option plan on November 30, 2019, that provided that 74,400 shares of $5 par value stock be designated as available for the granting of options to officers of the corporation at a price of $10 a share. The market price was $12 a share on November 30, 2020.On January 2, 2020, options to purchase 29,800 shares were granted to president Tom Winter—14,200 for services to be rendered in 2020 and 15,600 for services to be rendered in 2021. Also on that date, options to purchase 16,600 shares were granted to vice president Michelle Bennett—8,300 for services to be rendered in 2020 and 8,300 for services to be rendered in 2021. The market price of the stock was $15 a share on January 2, 2020. The options were exercisable for a period of one year following the year in which the services were rendered. The fair value of the options on the grant date was $4 per option.In 2021, neither the president nor the vice president exercised their options because…
Assume that on January 1, year 1, ABC Incorporated issued 5,000 stock options with an estimated value of $10 per option. Each option entitles the owner to purchase one share of ABC stock for $25 a share (the per share price of ABC stock on January 1, year 1, when the options were granted). The options vest at the end of the day on December 31, year 2. All 5,000 stock options were exercised in year 3 when the ABC stock was valued at $31 per share. Identify ABC's year 1, 2, and 3 tax deductions and book-tax differences (indicate as favorable or unfavorable and as permanent or temporary) associated with the stock options under the following alternative scenarios: Required: a. The stock options are incentive stock options. b. The stock options are nonqualified stock options. Complete the following table. Note: For all requirements, leave no answer blank. Enter zero if applicable and select "Not Applicable" if no effect. Under ASC 718 a. Incentive Stock Options b. Nonqualified Stock Options…
Recording Shares Issued through an Employee Share Purchase Plan Rice Corporation has a stock purchase plan with the following provision. Each full-time employee with a minimum of one year’s service may acquire from Rice Corporation, its common stock, $10 par, through payroll deductions at 5% below the market price on the date selected by the employee for a stock purchase (the exercise date). The exercise decision must be made within one year from the payroll deduction date. Employee Adams signed a payroll deduction agreement form on January 1, 2020, for $48 per month. At that date, the market price of the stock was $27 per share. At the end of 2020, Adams requested that stock be purchased equal to the amount Adams accumulated as a deposit. At that date, the market price of the stock was $25 per share. Required Prepare the journal entry on December 31, 2020, for the issuance of shares to Adams. Hint: The company credited Liability—Employee Stock Purchase Plan at the time of each payroll…
Computing EPS: Contingently Issuable Shares On January 1, to motivate top management, Resume Inc. granted 800 options to purchase common stock at $10 per share to key officers if net income increased by 5% over the prior year. The fair value of the options on January 1 is estimated to be $4,000. Resume Inc. reported net income of $40,000 for the year, which represented a 7% increase over the prior year. How will the options affect the calculation of the company's diluted earnings per share? Increase the denominator My 0x shares Check
Aa.36. Accounting for Call Options On January 2, Starz Inc. established an agreement with Silver Co. allowing Starz Inc. to call 100 shares of Gold Inc. stock at a strike price of $45 per share through June 30 of the following year. On January 2, the current market price of Gold Inc. is $45 and the option premium is $200. On June 30, the fair value of the option is $900. Required a. Prepare the journal entry on January 2 to record the purchase of the call option. b. Prepare the entry to adjust the call option to fair value on June 30. At what price per share of Gold Inc. will the call option become valuable to Starz Inc.?● Note: Round your answer to the nearest penny.
help please answer in text form with proper workings and explanation for each and every part and steps with concept and introduction no AI no copy paste remember answer must be in proper format with all working
P15-1 Subscriptions On August 3, 2019, the date of incorporation, Quinn Company accepts separate subscriptions for 1,000 shares of $100 par preferred stock at $104 per share and 9,000 shares of no-par, no-stated-value common stock for $22 per share. The subscription contracts require a 10% down payment, with the balance due by Novem-ber 1, 2019. Shares are issued to each subscriber upon full payment. On November 1, Quinn received the remain-ing balances for the shares of preferred stock and common stock. Required: Prepare journal entries to record all the transactions related to: 1. the preferred stock 2. the common stock
Do the requirement Tips and check figures:
Practice Exercises - Restricted Stock 1. Studymore Company issues 4,400 shares of restricted stock to its CFO, Dane Nowork, on January 1, 2020. The stock has a fair value of $123,000 on this date. The service period related to this restricted stock is 4 years. Vesting occurs if Nowork stays with the company for 4 years. The par value of the stock is $5. At December 31, 2021, the fair value of the stock is $133,000. Prepare the journal entries to record the restricted stock on January 1, 2020 (the date of grant), and December 31, 2021. On March 4, 2022, Nowork leaves the company. Prepare the journal entry to account for this forfeiture. General Journal Debit Credit ASH ENC INT
Jan 1 A prospectus was issued inviting applications for 200, 000 ordinary shares at an issue price of $10, with $6 payable on application, $2 Payable on the allotment and the balance payable on future call as determined by the directors. Jan 31 Applications closed with the ordinary share issue oversubscribed by 50,000. Feb 1 All shares were allotted on a pro- rata basis, and application money was refunded to unsuccessful applicants. Feb 15 Share issue costs of $15000 were paid. All outstanding Allotment money was received. May 25 The final call was made with money received by 10th June. June 10 The call money was received from holders of 180,000 ordinary shares. June 15 The shares on which call money was not received were forfeited. June 25 The forfeited shares were placed with a financial Institution and paid to $10 on a payment of $8.60. The cash was received from the financial institution, and any balance in the forfeited shares account was returned to the former shareholders.…

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