Microsoft provides compensation to executives in the form of a variety of incentive compensation plans, including restricted stockaward grants. The following is an excerpt from a disclosure note from Microsoft's 2017 annual report:Note 20 Employee Stock and Savings Plans (in part)Stock awards are grants that entitle the holder to shares of common stock as the award vests. Our stock awards generally vest over afive-year period.... During fiscal year 2017, the following activity occurred under our plans:WeightedSharesAverage($ inGrant-Datemillions)Fair ValueStock awards:Nonvested balance,beginning of yearGrantedAssumed in acquisitions194$36.928455.642359.0937.36Vested(80)(20)Forfeited43.71Nonvested balance, end of year201$ 46.32Required:If all awards are granted, acquired, vested, and forfeited evenly throughout the year, what is the compensation expense in fiscal 2017pertaining to the previous and current stock awards? Assume forfeited shares were granted evenly throughout the three previousyears

Employee stock options = $194 million value of shares Number of stock options = $194 million/$10…

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 2017 annual report: Note 20 Employee Stock and Savings Plans (in part) Stock awards are grants that entitle the holder to shares of common stock as the award vests. Our stock awards generally vest over a five-year period.... During fiscal year 2017, the following activity occurred under our plans: Shares ($ in millions) Weighted Average Grant-Date Fair Value Stock awards: Nonvested balance, beginning of year Granted Assumed in acquisitions Vested 194 $36.92 84 55.64 23 59.09 (80) (20) 37.36 Forfeited 43.71 Nonvested balance, end of year 201 $46.32 Required: If all awards are granted, acquired, vested, and forfeited evenly throughout the year, what is the compensation expense in fiscal 2017 pertaining to the previous and current stock awards? Assume forfeited shares were granted evenly throughout the three previous

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 2017 annual report: Note 20 Employee Stock and Savings Plans (in part) Stock awards are grants that entitle the holder to shares of common stock as the award vests. Our stock awards generally vest over a five-year period.... During fiscal year 2017, the following activity occurred under our plans: Shares ($ in millions) Weighted Average Grant-Date Fair Value Stock awards: Nonvested balance, beginning of year Granted Assumed in acquisitions Vested 194 $36.92 84 55.64 23 59.09 (80) (20) 37.36 Forfeited 43.71 Nonvested balance, end of year 201 $46.32 Required: If all awards are granted, acquired, vested, and forfeited evenly throughout the year, what is the compensation expense in fiscal 2017 pertaining to the previous and current stock awards? Assume forfeited shares were granted evenly throughout the three previous

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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First Link Services granted 5.8 million of its $1 par common shares to executives, subject to forfeiture if employment is terminated within five years. The common shares have a market price of $20 per share on the grant date of the restricted stock award. Ignoring taxes, what is the effect on earnings in the year after the shares are granted to executives?
The Josh Cutler Corporation provides restricted stock to certain executives. Under the plan, the company granted 30 million shares on January 1, 2024, which vest in four years. The fair value of the shares is $15.00. No forfeitures are anticipated. Ignore taxes. Required: 1. Determine the total compensation cost pertaining to the restricted stock. 2. & 3. Prepare the appropriate journal entries (if any).
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…
Witter House is a calendar-year firm with 300 million common shares outstanding throughout 2016 and 2017. As part of its executive compensation plan, at January 1, 2015, the company had issued 30 million executive stock options permitting executives to buy 30 million shares of stock for $10 within the next eight years, but not prior to January 1, 2018. The fair value of the options was estimated on the grant date to be $3 per option. In 2016, Witter House began granting employees stock awards rather than stock options as part of its equity compensation plans and granted 15 million restricted common shares to senior executives at January 1, 2016. The shares vest four years later. The fair value of the stock was $12 per share on the grant date. The average price of the common shares was $12 and $15 during 2016 and 2017, respectively. The stock options qualify for tax purposes as an incentive plan. The restricted stock does not. The company’s net income was $150 million and $160 million…
Microsoft Corporation's disclosure notes for the year ending June 30, 2020, included the following regarding its $0.00000625 par common stock: Employee Stock Purchase Plan-We have an ESPP for all eligible employees. Shares of our common stock may be purchased by employees at three-month intervals at 90% of the fair market value on the last trading day of each three-month period. Employees may purchase shares having a value not exceeding 15% of their gross compensation during an offering period. Employees purchased the following shares during the periods presented: (Shares in millions) Year Ended June 30, Shares purchased Average price per share 2020 2019 9 11 13 $142.22 $104.85 $76.40 2018 As of June 30, 2020, 96 million shares of our common stock were reserved for future issuance through the ESPP. Required: Prepare the journal entry that summarizes Microsoft's employee share purchases for the year ending June 30, 2020. Note: If no entry is required for a transaction/event, select "No…
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Cheng/Hamm Incorporated developed a business strategy that uses stock options as a major compensation incentive for its top executives. On January 1, 2024, 23 million options were granted, each giving the executive owning them the right to acquire five $1 par common shares. The exercise price is the market price on the grant date – $30 per share ($150 per option). Options vest on January 1, 2028. They cannot be exercised before that date and will expire on December 31, 2030. The fair value of the 23 million options, estimated by an appropriate option pricing model, is $49 per option. Ignore income tax. Cheng/Hamm's compensation expense in 2024 for these stock options was: Note: Round your answer to nearest whole dollar amount.
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…
Union Pacific Corp uses stock options as a major compensation incentive for its top executives. On January 1, 2021, 23 million options were granted, each giving the executive owning them the right to acquire five $1 par common shares. The exercise price is the market price on the grant date – $30 per share ($120 per option). Options vest on January 1, 2025. They cannot be exercised before that date and will expire on December 31, 2027. The fair value of the 23 million options, estimated by an appropriate option pricing model, is $43 per option. Ignore income tax. Union Pacific Corp's compensation expense in 2021 for these stock options was: (Round your answer to nearest whole dollar amount.) Multiple Choice $247 million. $989 million. $494 million. $0.