Stock awards

Question 1

share based compensation 2 goals

Answer 1

1. determine the fv of the compensation

2. expense the compensation over the periods in which they are performed

Question 2

shared based compensation goals-*M.

Answer 2

1. find out how much guap is going into paying compensation

2. expense that ungodly burden over life of the activity of the slime ball executive

Question 3

objectives for the chapter
19
Share based compensation
& EPS

Answer 3

1. stock award plans
2. stock options
3. accounting for employee share purchase
4. simple and complex capital structure

Question 4

Stock Award Plans
FEATURES:
when can’t sell

Answer 4

1. -The shares usually are restricted (non-vested) so that benefits are tied to continued employment.
2. subject to forfeiture if employment is terminated
3. The employee cannot sell the shares during the restriction period. => Between GRANT Date and VESTING Date.

Question 5

Stock Award Plans

service period

Answer 5

The service period usually is the period from the date of grant to when restrictions are lifted (the vesting date).

Question 6

Stock Award Plans

compensation amount

Answer 6

1-The compensation is simply the market price of the stock at the grant date.
2-Compensation is accrued as expense over the service period for which participants receive the shares.

Question 7

restricted stock is forfeited

Answer 7

If restricted stock is forfeited, related entries previously made would simply be reversed.

Question 8

service period and

vesting period are same True or false

Answer 8

True

Question 9

Journal entry for stock award plan compensation expense
(S.A.P)
DR?
CR?

Answer 9

Compensation expense ($60 million ÷ 4 years) 15 Paid-in capital – restricted stock 15

Question 10

the vesting date Definition

and journal entry

Answer 10

When restrictions are lifted
December 31, 2014 (On Vesting Date):
Paid-in capital– restricted stock (5 million sh. at $12 60 Common stock (5 million shares at $1 par) 5 Paid-in capital – excess of par (to balance) 55

Question 11

A divisional manager holding 1 million of the restricted shares left the company to become
CEO of a competitor on September 15, 2014, before the required service period ended

Answer 11

September 15, 2014
Restricted Stock
Paid-in capital—restricted stock (10% × $150) ……………………………… 15
Compensation expense ……………………………………………………… 15

10% is the total amt of shares X the amount of the period that suppose to be accrued

Dec.31.2014
Compensation expense [$450 – (.10 × $450) – 150 + 15] ÷ 2 years …. 135
Paid-in capital—restricted stock ………………………………………….. 135