IT Solutions Ltd. has a cash-settled SARS program for employees. These employees will receive a cash payment after five years of service, calculated as the excess of share price over $10.75. In early 20X1, employees in total are granted 260,000 units in the program. The fair value of one SARS unit is estimated at $1 at the end of 20X1, $3 at the end of 20X2, and $2 at the end of 20X3. Estimated retention is 90% at the end of 20X1, 88% at the end of 20X2, and 75% at the end of 20X3. The payment is made at the end of 20X5. Required: Provide the journal entry to be recorded with respect to the SARS program at the end of 20X1, 20X2, and 20X3. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Do not round intermediate calculations.)
IT Solutions Ltd. has a cash-settled SARS program for employees. These employees will receive a cash payment after five years of service, calculated as the excess of share price over $10.75. In early 20X1, employees in total are granted 260,000 units in the program. The fair value of one SARS unit is estimated at $1 at the end of 20X1, $3 at the end of 20X2, and $2 at the end of 20X3. Estimated retention is 90% at the end of 20X1, 88% at the end of 20X2, and 75% at the end of 20X3. The payment is made at the end of 20X5. Required: Provide the journal entry to be recorded with respect to the SARS program at the end of 20X1, 20X2, and 20X3. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Do not round intermediate calculations.)
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter19: Accounting For Post Retirement Benefits
Section: Chapter Questions
Problem 3RE: Pinecone Company has plan assets of 500,000 at the beginning of the current year and expects to earn...
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![IT Solutions Ltd. has a cash-settled SARS program for employees. These employees will receive a cash
payment after five years of service, calculated as the excess of share price over $10.75. In early 20X1,
employees in total are granted 260,000 units in the program.
The fair value of one SARS unit is estimated at $1 at the end of 20X1, $3 at the end of 2ox2, and $2 at
the end of 20X3. Estimated retention is 90% at the end of 20X1, 88% at the end of 20X2, and 75% at
the end of 20X3. The payment is made at the end of 20X5.
Required:
Provide the journal entry to be recorded with respect to the SARS program at the end of 20X1, 20X2,
and 20X3. (If no entry is required for a transaction/event, select "No journal entry required" in the
first account field. Do not round intermediate calculations.)
View transaction list
Journal entry worksheet
1
2
3
>
Record the entry for issue of cash-settled SARS to employees.
Note: Enter debits before credits.
Year
General Journal
Debit
Credit
20X1
Record entry
Clear entry
View general joumal](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F53c99310-7e99-4aa1-8e68-633dc5a9b6cd%2F39a36b18-d6b3-4a76-bcdd-c79f39a6ac03%2Fbv007wk_processed.jpeg&w=3840&q=75)
Transcribed Image Text:IT Solutions Ltd. has a cash-settled SARS program for employees. These employees will receive a cash
payment after five years of service, calculated as the excess of share price over $10.75. In early 20X1,
employees in total are granted 260,000 units in the program.
The fair value of one SARS unit is estimated at $1 at the end of 20X1, $3 at the end of 2ox2, and $2 at
the end of 20X3. Estimated retention is 90% at the end of 20X1, 88% at the end of 20X2, and 75% at
the end of 20X3. The payment is made at the end of 20X5.
Required:
Provide the journal entry to be recorded with respect to the SARS program at the end of 20X1, 20X2,
and 20X3. (If no entry is required for a transaction/event, select "No journal entry required" in the
first account field. Do not round intermediate calculations.)
View transaction list
Journal entry worksheet
1
2
3
>
Record the entry for issue of cash-settled SARS to employees.
Note: Enter debits before credits.
Year
General Journal
Debit
Credit
20X1
Record entry
Clear entry
View general joumal
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