Concept explainers
What is the allocation period used to expense stock-based compensation?

Answer to Problem 19.1Q
The stock based compensation is to be expensed at accrual basis.
Explanation of Solution
Stock-Based Compensation:
It is the advantage which is earned by the employees by rendering their services in the company. Instead of paying in cash, they are been provided with listed number of shares at a given price. The employer records these benefits as an expense in his books of accounts and also reports it in income statement.
Accrual Period used to Expense Stock based Compensation:
The amount which the employees had received at the end of their service rendering period should be estimated on accrual basis because it is the amount that they had earned while providing the service which is accumulated and received at last.
Hence, the allocation period used is accrual basis to expense stock-based compensation.
Want to see more full solutions like this?
Chapter 19 Solutions
Intermediate Accounting
Additional Business Textbook Solutions
Principles of Operations Management: Sustainability and Supply Chain Management (10th Edition)
Principles of Microeconomics (MindTap Course List)
Horngren's Cost Accounting: A Managerial Emphasis (16th Edition)
Operations Management: Processes and Supply Chains (12th Edition) (What's New in Operations Management)
Marketing: An Introduction (13th Edition)
- Find the break even pointarrow_forwardGENERAL ACCOUNTarrow_forwardDuring FY 2016 GM Manufacturing had total manufacturing costs are $470,000. Their cost of goods manufactured for the year was $416,000. The January 1, 2017 balance of Work-in-Process Inventory is $65,000. Use this information to determine the dollar amount of the FY 2016 beginning Work-in-Process Inventory. Ansarrow_forward
- General accountingarrow_forwardFind the break even point general accountingarrow_forwardComputing the gross profit percentage Edible Art earned net sales revenue of $75,050,000 in 2019. The cost of goods sold was $55,650,000, and net income reached $13,000,000, the company s highest ever. Compute the company s gross profit percentage for 2019.arrow_forward
- EBK CONTEMPORARY FINANCIAL MANAGEMENTFinanceISBN:9781337514835Author:MOYERPublisher:CENGAGE LEARNING - CONSIGNMENTCornerstones of Cost Management (Cornerstones Ser...AccountingISBN:9781305970663Author:Don R. Hansen, Maryanne M. MowenPublisher:Cengage LearningCollege Accounting, Chapters 1-27AccountingISBN:9781337794756Author:HEINTZ, James A.Publisher:Cengage Learning,
- Cornerstones of Financial AccountingAccountingISBN:9781337690881Author:Jay Rich, Jeff JonesPublisher:Cengage LearningCentury 21 Accounting Multicolumn JournalAccountingISBN:9781337679503Author:GilbertsonPublisher:Cengage



