Intermediate Accounting
3rd Edition
ISBN: 9780136912644
Author: Elizabeth A. Gordon; Jana S. Raedy; Alexander J. Sannella
Publisher: Pearson Education (US)
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Question
Chapter 19, Problem 19.2MC
To determine
To identify: The correct option.
Given information:
Number of Shares as Employee Stock Option on January 1 is 2,000 shares.
Purchase price of share as on January 1 is $40.
Fair Value of the options totaled as on January 1 is $20,000.
Price at which the stock was sold in December 31, Year 1 is $45.
Price at which the stock was sold in December 31, Year 2 is $55.
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Rich Drennen’s personal statement of financial condition at December 31, 20X6, shows net worth of $400,000 before consideration of employee stock options owned on that date. Information relating to the stock options is as follows:
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Thompsons Inc. issues 2,000 shares of Restricted Stock to the CEO on January 1, 2021. The stock has a fair value of $132,000 on this date. The service period related to the stock is 3 years. Vesting occurs after 3 years from the date of issue. The stock has a par value of $10 per share. At december 31, 2021, the stock had a market value of $180,000.
At December 31, 2021 [After 1 year], the journal entry to record compensation expense would include a
A. credit to paid in capital - restricted stock $44,000
B. credit to unearned compensation $44,000
C. credit to compensation expense $60,000
D. debit to unearned compensation $44,000
E. debit to compensation expense $132,000
Part 2:
Assume at february 3, 2023 [during 3rd year of vesting], the CEO left Thompsons employment. The journal entry to account for the foreiture of this Restricted Stock issue would include a
A. debit to paid in capital - common stock $132,000
B. credit to compensation expense (or retained earnings) $88,000…
Kramer Company is authorized by the state to issue 10,000 shares of 8 percent, $100 parvalue preferred stock. On January 1, Year One, Kramer issues 5,000 shares for $125 pershare. On December 13, Year One, Kramer’s board of directors declares the annual dividendto owners on record as of January 3, Year Two. The dividend will be distributed January 18,Year Two. What liability should Kramer Company report on its December 31, Year One, balancesheet as a result of this dividend?
Responses
$40,000
$80,000
$50,000
$0
Chapter 19 Solutions
Intermediate Accounting
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. 19.5QCh. 19 - Prob. 19.6QCh. 19 - Prob. 19.7QCh. 19 - Prob. 19.8QCh. 19 - Prob. 19.9QCh. 19 - Prob. 19.10Q
Ch. 19 - Prob. 19.1MCCh. 19 - Prob. 19.2MCCh. 19 - Prob. 19.3MCCh. 19 - Prob. 19.4MCCh. 19 - Prob. 19.5MCCh. 19 - Prob. 19.6MCCh. 19 - Prob. 19.7MCCh. 19 - Prob. 19.8MCCh. 19 - Prob. 19.1BECh. 19 - Prob. 19.2BECh. 19 - Prob. 19.3BECh. 19 - Prob. 19.4BECh. 19 - Prob. 19.5BECh. 19 - Prob. 19.6BECh. 19 - Employee Stock Options, Liability-Classified...Ch. 19 - Prob. 19.8BECh. 19 - Prob. 19.9BECh. 19 - Prob. 19.10BECh. 19 - Prob. 19.11BECh. 19 - Prob. 19.12BECh. 19 - Prob. 19.13BECh. 19 - Prob. 19.14BECh. 19 - Prob. 19.15BECh. 19 - Prob. 19.16BECh. 19 - Prob. 19.17BECh. 19 - Prob. 19.18BECh. 19 - Prob. 19.19BECh. 19 - Prob. 19.20BECh. 19 - Prob. 19.21BECh. 19 - Prob. 19.22BECh. 19 - Prob. 19.23BECh. 19 - Prob. 19.24BECh. 19 - Prob. 19.25BECh. 19 - Prob. 19.26BECh. 19 - Prob. 19.27BECh. 19 - Prob. 19.28BECh. 19 - Prob. 19.1ECh. 19 - Prob. 19.2ECh. 19 - Employee Stock Options. Equity-Classified Awards....Ch. 19 - Prob. 19.4ECh. 19 - Prob. 19.5ECh. 19 - Prob. 19.6ECh. 19 - Prob. 19.7ECh. 19 - Prob. 19.8ECh. 19 - Prob. 19.9ECh. 19 - Prob. 19.10ECh. 19 - Prob. 19.11ECh. 19 - Prob. 19.12ECh. 19 - Prob. 19.13ECh. 19 - Prob. 19.14ECh. 19 - Prob. 19.15ECh. 19 - Prob. 19.16ECh. 19 - Prob. 19.1PCh. 19 - Prob. 19.2PCh. 19 - Prob. 19.3PCh. 19 - Prob. 19.4PCh. 19 - Prob. 19.5PCh. 19 - Prob. 19.6PCh. 19 - Prob. 19.7PCh. 19 - Prob. 19.8PCh. 19 - Prob. 19.9PCh. 19 - Prob. 19.10PCh. 19 - Prob. 19.11PCh. 19 - Prob. 19.12PCh. 19 - Prob. 1JCCh. 19 - Prob. 2FSCCh. 19 - Prob. 1SSCCh. 19 - Prob. 2SSCCh. 19 - Basis for Conclusions Case 1: Are Employee Stock...Ch. 19 - Prob. 2BCC
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