Shares: The common stock is divided into smaller units of equal value called as Shares and issued to the public, to raise funds.
To Explain: TheRestricted Stock, difference between Restricted Stocks and RSU, and determination and recording of compensation expense for restricted stock award plan.
Explanation of Solution
Restricted Stock: Restricted stock is the portion of shares held up by the management, to be issued for the employees, which are subject to some conditions.
Restricted Stock: Restricted stock is the portion of shares held up by the management, to be issued for the employees, which are subject to some conditions.
Restricted Stock Units (RSU): RSUs are a type of restricted stock which is held up for some time, before being issued to the employees. Further they do not oblige the employees to stay in the company. Till they are issued to the employee, the employer possesses the right.
The compensation expense for the restricted stock award plan is the fair value of the stock equal to the market value at the grant date. The compensation expense is the accrued fair value over the service period till the vesting date. However, this could be made in the form of cash, shares or at times, both.
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Chapter 19 Solutions
Intermediate Accounting
- Need help with this accounting questionsarrow_forwardDon't use ai given answer accounting questionsarrow_forwardNovak Company has the following stockholders' equity accounts at December 31, 2025. Common Stock ($100 par value, authorized 7,600 shares) $459,100 Retained Earnings 266,700 a. Prepare entries in journal form to record the following transactions, which took place during 2026 1. 290 shares of outstanding stock were purchased at $97 per share. (These are to be accounted for using the cost method.) 2. A $22 per share cash dividend was declared. 3. The dividend declared in (2) above was paid. 4. The treasury shares purchased in (1) above were resold at $101 per share. 5. 500 shares of outstanding stock were purchased at $103 per share. 6. 380 of the shares purchased in (5) above were resold at $96 per share. b. Prepare the stockholders' equity section of Novak Company's balance sheet after giving effect to these transactions, assuming that the net income for 2026 was $86,300. State law requires restriction of retained earnings for the amount of treasury stock. The answer is not 705,118arrow_forward
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