Performance-based options : The stock options for which compensation plans are based on the performance targets like divisional revenue, or sales revenue, or earnings per share, are referred to performance-based options. Journal entry : Journal entry is a set of economic events which can be measured in monetary terms. These are recorded chronologically and systematically. Debit and credit rules: Debit an increase in asset account, increase in expense account, decrease in liability account, and decrease in stockholders’ equity accounts. Credit decrease in asset account, increase in revenue account, increase in liability account, and increase in stockholders’ equity accounts. To indicate : The action to be taken for the options in 2017 and in the next years, if the target of achieving 5% increase in divisional revenue is probable

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Answer 1

Question

Chapter 19, Problem 19.9BE

To determine

Performance-based options: The stock options for which compensation plans are based on the performance targets like divisional revenue, or sales revenue, or earnings per share, are referred to performance-based options.

Journal entry: Journal entry is a set of economic events which can be measured in monetary terms. These are recorded chronologically and systematically.

Debit and credit rules:

Debit an increase in asset account, increase in expense account, decrease in liability account, and decrease in stockholders’ equity accounts.

Credit decrease in asset account, increase in revenue account, increase in liability account, and increase in stockholders’ equity accounts.

To indicate: The action to be taken for the options in 2017 and in the next years, if the target of achieving 5% increase in divisional revenue is probable

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Based on potential sales of 800 units per year, a new product at Waverly Manufacturing has estimated traceable costs of $1,600,000. What is the target price to obtain a 25% profit margin on sales? A. $2,500.68 B. $2,400.21 C. $2,666.67 D. $1,950.55

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Answer 2

Question

Chapter 19, Problem 19.9BE

To determine

Performance-based options: The stock options for which compensation plans are based on the performance targets like divisional revenue, or sales revenue, or earnings per share, are referred to performance-based options.

Journal entry: Journal entry is a set of economic events which can be measured in monetary terms. These are recorded chronologically and systematically.

Debit and credit rules:

Debit an increase in asset account, increase in expense account, decrease in liability account, and decrease in stockholders’ equity accounts.

Credit decrease in asset account, increase in revenue account, increase in liability account, and increase in stockholders’ equity accounts.

To indicate: The action to be taken for the options in 2017 and in the next years, if the target of achieving 5% increase in divisional revenue is probable

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Answer 3

Question

Chapter 19, Problem 19.9BE

To determine

Performance-based options: The stock options for which compensation plans are based on the performance targets like divisional revenue, or sales revenue, or earnings per share, are referred to performance-based options.

Journal entry: Journal entry is a set of economic events which can be measured in monetary terms. These are recorded chronologically and systematically.

Debit and credit rules:

Debit an increase in asset account, increase in expense account, decrease in liability account, and decrease in stockholders’ equity accounts.

Credit decrease in asset account, increase in revenue account, increase in liability account, and increase in stockholders’ equity accounts.

To indicate: The action to be taken for the options in 2017 and in the next years, if the target of achieving 5% increase in divisional revenue is probable

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Answer 4

Question

Chapter 19, Problem 19.9BE

To determine

Performance-based options: The stock options for which compensation plans are based on the performance targets like divisional revenue, or sales revenue, or earnings per share, are referred to performance-based options.

Journal entry: Journal entry is a set of economic events which can be measured in monetary terms. These are recorded chronologically and systematically.

Debit and credit rules:

Debit an increase in asset account, increase in expense account, decrease in liability account, and decrease in stockholders’ equity accounts.

Credit decrease in asset account, increase in revenue account, increase in liability account, and increase in stockholders’ equity accounts.

To indicate: The action to be taken for the options in 2017 and in the next years, if the target of achieving 5% increase in divisional revenue is probable

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Answer 5

Chapter 19, Problem 19.9BE

To determine

Performance-based options: The stock options for which compensation plans are based on the performance targets like divisional revenue, or sales revenue, or earnings per share, are referred to performance-based options.

Journal entry: Journal entry is a set of economic events which can be measured in monetary terms. These are recorded chronologically and systematically.

Debit and credit rules:

Debit an increase in asset account, increase in expense account, decrease in liability account, and decrease in stockholders’ equity accounts.

Credit decrease in asset account, increase in revenue account, increase in liability account, and increase in stockholders’ equity accounts.

To indicate: The action to be taken for the options in 2017 and in the next years, if the target of achieving 5% increase in divisional revenue is probable

Answer 6

Chapter 19, Problem 19.9BE

To determine

Performance-based options: The stock options for which compensation plans are based on the performance targets like divisional revenue, or sales revenue, or earnings per share, are referred to performance-based options.

Journal entry: Journal entry is a set of economic events which can be measured in monetary terms. These are recorded chronologically and systematically.

Debit and credit rules:

Debit an increase in asset account, increase in expense account, decrease in liability account, and decrease in stockholders’ equity accounts.

Credit decrease in asset account, increase in revenue account, increase in liability account, and increase in stockholders’ equity accounts.

To indicate: The action to be taken for the options in 2017 and in the next years, if the target of achieving 5% increase in divisional revenue is probable

Answer 7

Chapter 19, Problem 19.9BE

To determine

Performance-based options: The stock options for which compensation plans are based on the performance targets like divisional revenue, or sales revenue, or earnings per share, are referred to performance-based options.

Journal entry: Journal entry is a set of economic events which can be measured in monetary terms. These are recorded chronologically and systematically.

Debit and credit rules:

Debit an increase in asset account, increase in expense account, decrease in liability account, and decrease in stockholders’ equity accounts.

Credit decrease in asset account, increase in revenue account, increase in liability account, and increase in stockholders’ equity accounts.

To indicate: The action to be taken for the options in 2017 and in the next years, if the target of achieving 5% increase in divisional revenue is probable

Answer 8

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Answer 9

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Answer 10

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Answer 11

Ch. 19 - Prob. 19.1Q Ch. 19 - Prob. 19.2Q Ch. 19 - The Tax Code differentiates between qualified...Ch. 19 - Stock option (and other share-based) plans often...Ch. 19 - What is a simple capital structure? How is EPS...Ch. 19 - Prob. 19.6Q Ch. 19 - Blake Distributors had 100,000 common shares...Ch. 19 - Why are preferred dividends deducted from net...Ch. 19 - Prob. 19.9Q Ch. 19 - The treasury stock method is used to incorporate...

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