IT Solutions Ltd. has a cash-settled SARS program for employees. These employees will receive a cash payment after five years of service, calculated as the excess of share price over $10.75. In early 20X1, employees in total are granted 260,000 units in the program. The fair value of one SARS unit is estimated at $1 at the end of 20X1, $3 at the end of 20X2, and $2 at the end of 20X3. Estimated retention is 90% at the end of 20X1, 88% at the end of 20X2, and 75% at the end of 20X3. The payment is made at the end of 20X5. Required: Provide the journal entry to be recorded with respect to the SARS program at the end of 20X1, 20X2, and 20X3. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Do not round intermediate calculations.)

IT Solutions Ltd. has a cash-settled SARS program for employees. These employees will receive a cash payment after five years of service, calculated as the excess of share price over $10.75. In early 20X1, employees in total are granted 260,000 units in the program. The fair value of one SARS unit is estimated at $1 at the end of 20X1, $3 at the end of 20X2, and $2 at the end of 20X3. Estimated retention is 90% at the end of 20X1, 88% at the end of 20X2, and 75% at the end of 20X3. The payment is made at the end of 20X5. Required: Provide the journal entry to be recorded with respect to the SARS program at the end of 20X1, 20X2, and 20X3. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Do not round intermediate calculations.)

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter19: Accounting For Post Retirement Benefits

Section: Chapter Questions

Problem 3RE: Pinecone Company has plan assets of 500,000 at the beginning of the current year and expects to earn...

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IT Solutions Ltd. has a cash - settled SARS program for employees. These employees will receive a cash payment after five years of service, calculated as the excess of share price over $8.75. In early 20X1, employees in total are granted 180,000 units in the program. The fair value of one SARS unit is estimated at $1 at the end of 20X1, $3 at the end of 20X2, and $2 at the end of 20X3. Estimated retention is 90% at the end of 20X1, 88% at the end of 20X2, and 75% at the end of 20X3. The payment is made at the end of 20X 5. Required: Provide the journal entry to be recorded with respect to the SARS program at the end of 20X 1, 20X2, and 20X3. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Do not round intermediate calculations.)
Courtland Company issues 25,000 SARS entitling executives to receive cash at the date of exercise for the difference between the market price and $30. The fair value of an SAR on the grant date is $4. The service period is 3 years. At the end of Year 3, the Liability for SARS is $125,000. In Year 4 when the market price of the stock is $42, the SARS are exercised. Which of the following is true when the SARS are exercised?, a. The Liability for SARS is reduced by $300,000. b. The Liability for SARS is reduced by $1,050,000. c. The cash outlay for the company is $750,000. d. The company receives $300,000.
IT Solutions Ltd. has a cash-settled SARs program for employees. These employees will receive a cash payment after five years of service, calculated as the excess of share price over $6.75. In early 20X1, employees in total are granted 100,000 units in the program. The fair value of one SARs unit is estimated at $1 at the end of 20X1, $3 at the end of 20X2, and $2 at the end of 20X3. Estimated retention is 90% at the end of 20X1, 88% at the end of 20X2, and 75% at the end of 20X3. The payment is made at the end of 20X5. Required: Provide the journal entry to be recorded with respect to the SARS program at the end of 20X1, 20X2, and 20X3. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Do not round intermediate calculations.)
A company established an option-based compensation plan. On the grant date, the fair value of an option was $ 15. A total of 100 select employees will receive (at the end of the three-year service period) 40 options if the company’s sales have increased by at least 10%, 60 options if sales have increased by a minimum of 15%, and 100 options if the increase in sales exceeds 20%. In the first year of the plan, the company estimated that sales would increase 12% and that 3% of employees would not complete the period of service. At the end of the second year, the company changed the estimates to 16% and 5% respectively. Calculate the compensation expense for the second year. Using the information provided, calculate the weighted average number of common shares outstanding for purposes of basic earnings per share for the years 2019 and 2020. • Common shares outstanding on January 1, 2019 = 240,000 • On July 1, 2019, 10,000 preferred shares were converted into 50,000 shares common • On…
Accurate Company charges its new franchisees an initial franchise fee of P2,500,000. Of this amount, P1,000,000 is payable in cash when the agreement is signed, and the remainder is to be paid in three equal annual installments which are evidenced by 12% interest-bearing note. In consideration therefore, Accurate will assist in locating business site, conduct a market study to estimate earnings potential, supervise construction of a building, and provide initial training to employees. On December 1, 2021, Accurate entered into a franchising agreement with a franchisee. The franchise outlet was opened on January 15, 2022. Accurate had incurred a cost of P800,000 related to the franchise and it has ascertained that the collection of the note is reasonably assured.1. How much is the Franchise Revenue to be recognized in 2021? 2. How much is the Unearned Revenue at December 31, 2021? 3. How much is the Revenue to be recognized in 2022?
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Commonly Corp. agrees to sell 100 of its products to M&H Co. for P30, 000 in August 2021. (P300 per product). Over the following six months, M&H will get the goods. The contract is updated after 60 items have been delivered, and Communion agrees to supply 80 more items for an extra P21, 600 (P270 per station) 90 more goods were supplied by commonly towards the conclusion of the year. Every sale is cash-on-delivery. Assume that the extra clause represents a potential amendment to the original contract. What annual income will be reported on the contract?
Lion Company granted 30,000 share appreciation rights which entitled key employees to receive cash equal to the difference between P20 and the market price of the share on the date each right is exercised. The service period is 2019 through 2021, and the rights are exercisable in 2022. The market price of the share was P25 and P28 on December 31, 2019 and 2020, respectively. How much should be recorded as compensation expense for 2020? A. 150,000 B. 120,000 C. 110,000 D. 10,000 E. answer not given
As part of its employee benefits plan, Omega Corporation acquired apiece of residential lot worth P2M for its Chief Executive Officer andconstructed upon it a house at a cost P4M. Ownership of the house andlot was turned over to the CEO upon completion of the construction. 40%of the value of the house and lot will be deducted from the director’ssalary over a period of 5 years. Compute the fringe benefit tax
On January, 2018 Leni Corp. grants each of its 200 employees in the production department share options. The share options will vest at the end of 2021, provided that the employees remain in the entity's employ and provided that the production increase by at least 50% by 2021. Actual production in 2018 (base year) is 120,000 units. If the production volume increase by an average of 50%-75% by 2021, each employee will receive 20 options each. If production volume inctease by 76% to 100% by 2021, each employee will receive 40 options each. If production volume increase by more than 100% by 2021, each employee will receive 50 options each. Four options plus P120 shall entitle the holder to acquire one ordinary shares (P100 par) at any time up to December 31, 2023. On the grant date, the company estimates that the share options have a fair value of P12 per option. There has been a 20% average increase in annual production for the past three years and that the company expects the same…
A firm enters into an 8-year contract for materials that cost $90,000 initially and $30,000/yr beginning at the end of the 4th year. The company decides to make a lump sum payment at the end of year 2 to pay off the remainder of the contract. What lump sum is necessary at 8% interest?
Shumpert, Inc., entered into a contract that was to take two years to complete, with an estimated cost of $ 1,348,800. The contract price was $1,888,320. Costs of the contract for 2022, the first year, totaled $1,011, 600. If required, round any division to two decimal places and round your final answers to the nearest dollar. a. What was the gross profit reported by the percentage of completion method for 2022? Sfill in the blank 1 b. After the contract was completed at the end of 2023 at a total cost of $1,416, 240, what was the gross profit reported by the percentage of completion method for 2023? Sfill in the blank 2