The value of compensation expense of the company. Giveninformation: Number of shares granted as SARs is 200,000. Vesting period is 3 years. Pre-established price at the beginning of the year is $55. Fair value of SAR as on December 31, 2018 is $7. Fair value of SAR as on December 31, 2019 is $13. Fair value of SAR as on December 31, 2020 is $11.

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Answer 1

Question

Chapter 19, Problem 19.6E

a.

To determine

The value of compensation expense of the company.

Giveninformation:

Number of shares granted as SARs is 200,000.

Vesting period is 3 years.

Pre-established price at the beginning of the year is $55.

Fair value of SAR as on December 31, 2018 is $7.

Fair value of SAR as on December 31, 2019 is $13.

Fair value of SAR as on December 31, 2020 is $11.

b.

To determine

To prepare: The journal entries of the value of compensation expense of the company.

Given information:

Number of shares granted as SARs is 200,000

Vesting period is 3 years.

Pre-established price at the beginning of the year is $55.

Fair value of SAR as on December 31, 2018 is $7.

Fair value of SAR as on December 31, 2019 is $13.

Fair value of SAR as on December 31, 2020 is $11.

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Merin Manufacturing produces a single product and follows a JIT policy where ending inventory must equal 20% of the next month's sales. It estimates that July's ending inventory will consist of 32,000 units. August and September sales are estimated to be 210,000 and 225,000 units, respectively. Merin assigns variable overhead at a rate of $4.25 per unit of production. Fixed overhead equals $385,000 per month. Compute the number of units to be produced and the total budgeted overhead that would appear on the factory overhead budget for the month of August.

Answer 2

Question

Chapter 19, Problem 19.6E

a.

To determine

The value of compensation expense of the company.

Giveninformation:

Number of shares granted as SARs is 200,000.

Vesting period is 3 years.

Pre-established price at the beginning of the year is $55.

Fair value of SAR as on December 31, 2018 is $7.

Fair value of SAR as on December 31, 2019 is $13.

Fair value of SAR as on December 31, 2020 is $11.

b.

To determine

To prepare: The journal entries of the value of compensation expense of the company.

Given information:

Number of shares granted as SARs is 200,000

Vesting period is 3 years.

Pre-established price at the beginning of the year is $55.

Fair value of SAR as on December 31, 2018 is $7.

Fair value of SAR as on December 31, 2019 is $13.

Fair value of SAR as on December 31, 2020 is $11.

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Answer 3

Question

Chapter 19, Problem 19.6E

a.

To determine

The value of compensation expense of the company.

Giveninformation:

Number of shares granted as SARs is 200,000.

Vesting period is 3 years.

Pre-established price at the beginning of the year is $55.

Fair value of SAR as on December 31, 2018 is $7.

Fair value of SAR as on December 31, 2019 is $13.

Fair value of SAR as on December 31, 2020 is $11.

b.

To determine

To prepare: The journal entries of the value of compensation expense of the company.

Given information:

Number of shares granted as SARs is 200,000

Vesting period is 3 years.

Pre-established price at the beginning of the year is $55.

Fair value of SAR as on December 31, 2018 is $7.

Fair value of SAR as on December 31, 2019 is $13.

Fair value of SAR as on December 31, 2020 is $11.

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Answer 4

Question

Chapter 19, Problem 19.6E

a.

To determine

The value of compensation expense of the company.

Giveninformation:

Number of shares granted as SARs is 200,000.

Vesting period is 3 years.

Pre-established price at the beginning of the year is $55.

Fair value of SAR as on December 31, 2018 is $7.

Fair value of SAR as on December 31, 2019 is $13.

Fair value of SAR as on December 31, 2020 is $11.

b.

To determine

To prepare: The journal entries of the value of compensation expense of the company.

Given information:

Number of shares granted as SARs is 200,000

Vesting period is 3 years.

Pre-established price at the beginning of the year is $55.

Fair value of SAR as on December 31, 2018 is $7.

Fair value of SAR as on December 31, 2019 is $13.

Fair value of SAR as on December 31, 2020 is $11.

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Answer 5

Chapter 19, Problem 19.6E

a.

To determine

The value of compensation expense of the company.

Giveninformation:

Number of shares granted as SARs is 200,000.

Vesting period is 3 years.

Pre-established price at the beginning of the year is $55.

Fair value of SAR as on December 31, 2018 is $7.

Fair value of SAR as on December 31, 2019 is $13.

Fair value of SAR as on December 31, 2020 is $11.

b.

To determine

To prepare: The journal entries of the value of compensation expense of the company.

Given information:

Number of shares granted as SARs is 200,000

Vesting period is 3 years.

Pre-established price at the beginning of the year is $55.

Fair value of SAR as on December 31, 2018 is $7.

Fair value of SAR as on December 31, 2019 is $13.

Fair value of SAR as on December 31, 2020 is $11.

Answer 6

Chapter 19, Problem 19.6E

a.

To determine

The value of compensation expense of the company.

Giveninformation:

Number of shares granted as SARs is 200,000.

Vesting period is 3 years.

Pre-established price at the beginning of the year is $55.

Fair value of SAR as on December 31, 2018 is $7.

Fair value of SAR as on December 31, 2019 is $13.

Fair value of SAR as on December 31, 2020 is $11.

Answer 7

Chapter 19, Problem 19.6E

a.

To determine

The value of compensation expense of the company.

Giveninformation:

Number of shares granted as SARs is 200,000.

Vesting period is 3 years.

Pre-established price at the beginning of the year is $55.

Fair value of SAR as on December 31, 2018 is $7.

Fair value of SAR as on December 31, 2019 is $13.

Fair value of SAR as on December 31, 2020 is $11.

Answer 8

b.

To determine

To prepare: The journal entries of the value of compensation expense of the company.

Given information:

Number of shares granted as SARs is 200,000

Vesting period is 3 years.

Pre-established price at the beginning of the year is $55.

Fair value of SAR as on December 31, 2018 is $7.

Fair value of SAR as on December 31, 2019 is $13.

Fair value of SAR as on December 31, 2020 is $11.

Answer 9

b.

To determine

To prepare: The journal entries of the value of compensation expense of the company.

Given information:

Number of shares granted as SARs is 200,000

Vesting period is 3 years.

Pre-established price at the beginning of the year is $55.

Fair value of SAR as on December 31, 2018 is $7.

Fair value of SAR as on December 31, 2019 is $13.

Fair value of SAR as on December 31, 2020 is $11.

Answer 10

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Answer 11

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Answer 12

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Answer 13

Ch. 19 - What is the allocation period used to expense...Ch. 19 - How do companies account for stock-based...Ch. 19 - Do companies with equity-based compensation plans...Ch. 19 - When accounting for employee stock options, will a...Ch. 19 - Prob. 19.5Q Ch. 19 - Prob. 19.6Q Ch. 19 - Prob. 19.7Q Ch. 19 - Prob. 19.8Q Ch. 19 - Prob. 19.9Q Ch. 19 - Prob. 19.10Q

Solution Summary: The author calculates the value of compensation expense of the company, based on the number of shares granted as SARs.

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