Intermediate Accounting: Reporting and Analysis, 2017 Update
2nd Edition
ISBN: 9781337116619
Author: James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher: Cengage Learning
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Chapter 15, Problem 9RE
To determine
Compute the compensation expense for the Year 2.
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An entity grants 100 cash share appreciation rights (SARs) to each of its 500 employees, on condition that the employees remain its employ for the next three years. During Year 1, 35 employees have left. The entity estimates that a further 60 will leave during years 2 and 3. During year 2, 40 employees have left and the entity estimates that a further 25 will leave during year 3. During year 3, 22 employees have left. At the end of year 3, 150 employees exercised their SARs , another 140 employees exercised their SARs at the end of year 4 and the remaining 113 employees exercised their SARs at the end of year 5. The entity estimates the fair value of the SARs at the end of each year in which a liability exists as shown below. At the end of year 3, all SARs held by the remaining employees vested. The intrinsic values of the SARs at the date of exercise (which equal the cash paid out) at the end of year 3, 4, and 5 are also shown below. What amount of compensation expense should be…
At the beginning of year 1, an entity grants 200 shares of each to 500 employees. The grant is conditional upon the employees remaining in the entity's employ until the performance condition described below is satisfied:
Performance Condition
The shares will vest at the end of:
Year 1 - if the entity's earnings increase by 15%.
Year 2 - if the entity's earnings increase by more than an average of 11% per year over the two-year period.
Year 3 - if the entity's earnings increase by more than an average of 8% per year over the three-year period.
The shares have a fair value of P15 at the beginning of year 1, which equals the share price at grant date. The entity does not expect to pay dividends over the three-year period.
The following events occurred:
Year 1
30 employees have left during year 1 and the entity expects, on the basis of a weighted average probability, that a further 40 will leave during year 2.
The entity's earnings have increased by 14% by the end of year 1 and the…
At the beginning of year 1, an entity grants 200 shares of each to 500 employees. The grant is conditional upon the employees remaining in the entity's employ until the performance condition described below is satisfied:
Performance Condition
The shares will vest at the end of:
Year 1 - if the entity's earnings increase by 15%.
Year 2 - if the entity's earnings increase by more than an average of 11% per year over the two-year period.
Year 3 - if the entity's earnings increase by more than an average of 8% per year over the three-year period.
The shares have a fair value of P15 at the beginning of year 1, which equals the share price at grant date. The entity does not expect to pay dividends over the three-year period.
The following events occurred:
Year 1
30 employees have left during year 1 and the entity expects, on the basis of a weighted average probability, that a further 40 will leave during year 2.
The entity's earnings have increased by 14% by the end of year 1 and the…
Chapter 15 Solutions
Intermediate Accounting: Reporting and Analysis, 2017 Update
Ch. 15 - Prob. 1GICh. 15 - Prob. 2GICh. 15 - What are the three components and the basic...Ch. 15 - List the various rights of a shareholder. Which do...Ch. 15 - What is the meaning of the following terms: (a)...Ch. 15 - Prob. 6GICh. 15 - Prob. 7GICh. 15 - How does preferred stock differ from common stock?Ch. 15 - What amount of the proceeds from the issuance of...Ch. 15 - Prob. 10GI
Ch. 15 - Prob. 11GICh. 15 - Prob. 12GICh. 15 - Prob. 13GICh. 15 - Prob. 14GICh. 15 - Prob. 15GICh. 15 - Prob. 16GICh. 15 - Prob. 17GICh. 15 - Prob. 18GICh. 15 - Prob. 19GICh. 15 - How is a preferred stock similar to a long-term...Ch. 15 - Prob. 21GICh. 15 - Prob. 22GICh. 15 - Prob. 23GICh. 15 - Prob. 24GICh. 15 - Prob. 25GICh. 15 - What additional disclosures about preferred and...Ch. 15 - Prob. 1MCCh. 15 - Prob. 2MCCh. 15 - What is the most likely effect of a stock split on...Ch. 15 - Prob. 4MCCh. 15 - Prob. 5MCCh. 15 - Prob. 6MCCh. 15 - Prob. 7MCCh. 15 - When treasury stock is purchased for cash at more...Ch. 15 - Preferred stock that may be retired by the...Ch. 15 - When treasury stock accounted for by the cost...Ch. 15 - Brown Corporation issues 800 shares of its 5 par...Ch. 15 - Heart Corporation entered into a subscription...Ch. 15 - Blue Corporation issues 200 packages of securities...Ch. 15 - Sun Corporation issues 500 shares of 8 par common...Ch. 15 - Next Level Morgan Corporation issues 500 packages...Ch. 15 - Prob. 6RECh. 15 - Prob. 7RECh. 15 - Prob. 8RECh. 15 - Prob. 9RECh. 15 - Assume Cole Corporation originally issued 300...Ch. 15 - Violet Corporation issues 1,200 shares of 150 par...Ch. 15 - Assume that Lily Corporation has outstanding 1,500...Ch. 15 - Tulip Corporation uses the cost method to account...Ch. 15 - Par Value and No-Par Stock Issuance Caswell...Ch. 15 - Combined Sale of Stock Maxville Company issues 300...Ch. 15 - Sale of Stock with Bonds Pilsen Company issues 12%...Ch. 15 - Issuance of Stock for Land Putt Company issues 500...Ch. 15 - Prob. 5ECh. 15 - Prob. 6ECh. 15 - Prob. 7ECh. 15 - Prob. 8ECh. 15 - Prob. 9ECh. 15 - Prob. 10ECh. 15 - Prob. 11ECh. 15 - Prob. 12ECh. 15 - Stock Rights with Preferred Stock Nelson...Ch. 15 - Various Journal Entries Lodi Company is authorized...Ch. 15 - Treasury Stock, Cost Method On January 1, Lorain...Ch. 15 - Prob. 16ECh. 15 - Treasury Stock, Cost Method (and IFRS Revaluation)...Ch. 15 - Treasury Stock, Cost and Par Value Methods On...Ch. 15 - Treasury Stock, No Par Propst-Steele Production...Ch. 15 - Prob. 1PCh. 15 - Prob. 2PCh. 15 - Prob. 3PCh. 15 - Prob. 4PCh. 15 - Prob. 5PCh. 15 - Prob. 6PCh. 15 - Issuances of Stock Cada Corporation is authorized...Ch. 15 - Issuances of Stock Epple Corporation is authorized...Ch. 15 - Prob. 9PCh. 15 - Comprehensive The shareholders equity section of...Ch. 15 - Prob. 11PCh. 15 - Comprehensive Byrd Companys Contributed Capital...Ch. 15 - Prob. 13PCh. 15 - Prob. 14PCh. 15 - Reconstruct Journal Entries At the end of its...Ch. 15 - Prob. 16PCh. 15 - Prob. 17PCh. 15 - Prob. 1CCh. 15 - Prob. 2CCh. 15 - Prob. 3CCh. 15 - Capital Stock Capital stock is an important area...Ch. 15 - Treasury Stock A corporation sometimes engages in...Ch. 15 - Prob. 6CCh. 15 - Prob. 7CCh. 15 - Compensatory Share Option Plan Tom Twitlet,...Ch. 15 - Prob. 9CCh. 15 - Treasury Stock For numerous reasons, a corporation...Ch. 15 - Prob. 11CCh. 15 - Prob. 12CCh. 15 - Prob. 13CCh. 15 - Prob. 14C
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