Ditsapelo Unlimited on 1 January 2024 granted 300 share appreciation rights (SARs) to each of its 200 employees on the condition that they continue to work for the entity for two years. At 1 January 2024, the entity expects that 50 of those employees will leave each year

Ditsapelo Unlimited on 1 January 2024 granted 300 share appreciation rights (SARs) to each of its 200 employees on the condition that they continue to work for the entity for two years. At 1 January 2024, the entity expects that 50 of those employees will leave each year

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Refer to the table below THUNDER INC. granted 5,000 share appreciation rights (SARS) to employees for services on January 1, 2008. Employees earn a cash payment equal to the appreciation in the share price between Januarv 1,2008 and December 31, 2010. The share appreciation rights vest on December 31, 2010. Dute Fair value of each SAR No. of SARS expected to vest 1-Jan-05 10 4,500 31-Dec-08 12 4,500 31-Dec-09 21 1.750 31-D-10 18 4,550
On January 1, 2020, Ruby Red Company granted to each of its four executives the right to choose either 1,000 ordinary shares or to receive cash payment equal to 900 shares. The grant is conditional upon the complecion of three years of service. The entity estimates that the value of the share alternative on January 1,2020 is P 150 per share. Ruby Red's ordinary share capital has a par value P 100. The following table shows the fair value of Ruby Red's ordinary share: January 1,2020 P P 158 December 31, 2020 160 December 31, 2021 165 December 31, 2022 168 December 31, 2023 172 One executive exercise his right to receive the cash alternative on December 31, 2022; the others chose to receive the ordinary shares on December 31, 2023. REQUIRED: a.) Determine the amount assigned to equity on January 1,2020. b.) Compute the amount charged to Compensation Expense during the years 2020, 2021,2022 and 2023 as a result of the foregoing. c.) Prepare all the entries relating to the above during the…
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On January 1, 2020, GALANTY Company granted XYZ, its president 20,000 share appreciation rights for past services. These rights are exercisable immediately and expire on January 1, 2022. During exercise, XYZ is entitled to receive cash for the excess of the share market price on the exercise date over the market price on the grant date. XYZ did not exercise any of the rights during 2020. The market price of GALANTY’s share was P30 on January 1, 2020 and P45 on December 31, 2020. As a result of the share appreciation rights, GALANTY should recognize compensation expense for 2020 of?
At the beginning of year 1, Bad Blood Company grants share option to each of its 100 employees working in the sales department. The share option will vest at the end of year 3, provided that the employees remain in the entity’s employ, and provide that the volume of sales of the product increases by an average of between 5 percent per year. If the volume of sales of the product increases by an average of between 5 percent and 10 percent per year, each employee will receive 100 share options. If the volume of sales increases by an average of between 11 and 15 percent each year, each employee will receive 200 share options. If the volume of sales increases by an average of 16% or more, each employee will receive 300 share options. On grant date, Bad Blood Company estimates that the share options have a fair value of 20 per option. Bad Blood Company also estimates that the volume of sales of the product will increase by an average of between 11 percent and 15 percent per year, and…
On January 1, 2020, ABC Company granted to employees a share-based payment with cash and share alternative. The provisions include the right to a cash payment equal to the value of 10,000 phantom shares or 15,000 ordinary shares with a par value of P40. The grant is conditional upon the completion of three years’ service. If the employees choose the share alternative, the shares must be held for three years after the vesting date.At grant date, the share price is P60. At the end of 2020, 2021 and 2022 the share prices are P63, P66 and P72, respectively.After taking into account the effect of vesting restrictions, the entity estimated that the fair value of the share alternative on grant date is P45. On January 1, 2023, the employees selected the share alternative.What amount of share premium should be recorded from the issuance of shares on January 1, 2023?
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At the beginning of year 1, Bad Blood Company grants share option to each of its 100 employees working in the sales department. The share option will vest at the end of year 3, provided that the employees remain in the entity’s employ, and provide that the volume of sales of the product increases by an average of between 5 percent per year. If the volume of sales of the product increases by an average of between 5 percent and 10 percent per year, each employee will receive 100 share options. If the volume of sales increases by an average of between 11 and 15 percent each year, each employee will receive 200 share options. If the volume of sales increases by an average of 16% or more, each employee will receive 300 share options. On grant date, Bad Blood Company estimates that the share options have a fair value of 20 per option. Bad Blood Company also estimates that the volume of sales of the product will increase by an average of between 11 percent and 15 percent per year, and…
On January 1, 2026, Waterway Inc. granted stock options to officers and key employees for the purchase of 24,000 shares of the company's $10 par common stock at $24 per share. The options were exercisable within a 5-year period beginning January 1, 2028, by grantees still in the employ of the company, and expiring December 31, 2032. The service period for this award is 2 years. Assume that the fair value option-pricing model determines total compensation expense to be $359,400. On April 1, 2027, 2,400 options were terminated when the employees resigned from the company. The market price of the common stock was $34 per share on this date. On March 31, 2028, 14,400 options were exercised when the market price of the common stock was $39 per share. Prepare journal entries to record issuance of the stock options, termination of the stock options, exercise of the stock options, and charges to compensation expense, for the years ended December 31, 2026, 2027, and 2028. (List all debit…
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