E 19-5 Stock options
American Optical Corporation provides a variety of share-based compensation plans to its employees. Under its executive stock option plan, the company granted options on January 1, 2011, that permit executives to acquire 4 million of the company's $1 par common shares within the next five years, but not before December 31, 2012 (the vesting date). The exercise price is the market price of the shares on the date of grant, $14 per share. The fair value of the 4 million options, estimated by an appropriate option pricing model, is $3 per option. No forfeitures are anticipated. Ignore taxes.
Required:
1. Determine the total compensation cost pertaining to the options.
2. Prepare the appropriate journal entry to record the award of options on January 1, 2011.
3. Prepare the appropriate journal entry to record compensation expense on December 31, 2011.
4. Prepare the appropriate journal entry to record compensation expense on December 31, 2012.
Click here for the solution: American Optical Corporation provides a variety of share-based compensation plans to its employees
Showing posts with label variety. Show all posts
Showing posts with label variety. Show all posts
Tuesday, November 10, 2015
Magnetic-Optical Corporation offers a variety of share-based compensation plans to employees
E 19-4 Restricted stock award plan; forfeitures anticipated
Magnetic-Optical Corporation offers a variety of share-based compensation plans to employees. Under its restricted stock award plan, the company on January 1, 2011, granted 4 million of its $1 par common shares to various division managers. The shares are subject to forfeiture if employment is terminated within three years. The common shares have a market price of $22.50 per share on the grant date.
Required:
1. Determine the total compensation cost pertaining to the restricted shares.
2. Prepare the appropriate journal entry to record the award of restricted shares on January 1, 2011.
3. Prepare the appropriate journal entry to record compensation expense on December 31, 2011.
4. Suppose Magnetic-Optical expected a 10% forfeiture rate on the restricted shares prior to vesting. Determine the total compensation cost.
Click here for the solution: Magnetic-Optical Corporation offers a variety of share-based compensation plans to employees
Magnetic-Optical Corporation offers a variety of share-based compensation plans to employees. Under its restricted stock award plan, the company on January 1, 2011, granted 4 million of its $1 par common shares to various division managers. The shares are subject to forfeiture if employment is terminated within three years. The common shares have a market price of $22.50 per share on the grant date.
Required:
1. Determine the total compensation cost pertaining to the restricted shares.
2. Prepare the appropriate journal entry to record the award of restricted shares on January 1, 2011.
3. Prepare the appropriate journal entry to record compensation expense on December 31, 2011.
4. Suppose Magnetic-Optical expected a 10% forfeiture rate on the restricted shares prior to vesting. Determine the total compensation cost.
Click here for the solution: Magnetic-Optical Corporation offers a variety of share-based compensation plans to employees
Friday, September 25, 2015
Dinkle Manufacturing Company manufactures a variety of tools and industrial equipment
ACC 560 Week 6 Assignment
P10-5A Dinkle Manufacturing Company manufactures a variety of tools and industrial equipment. The company operates through three divisions. Each division is an investment center. Operating data for the Home Division for the year ended December 31, 2008, and relevant budget data are as follows.
Actual Comparison with Budget
Sales $1,500,000 $100,000 favorable
Variable cost of goods sold 700,000 60,000 unfavorable
Variable selling and administrative expenses 125,000 25,000 unfavorable
Controllable fixed cost of goods sold 170,000 On target
Controllable fixed selling and administrative expenses 80,000 On target
Average operating assets for the year for the Home Division were $2,500,000 which was also the budgeted amount.
Instructions
(a) Prepare a responsibility report for the Home Division.
(b) Evaluate the manager’s performance. Which items will likely be investigated by top management?
(c) Compute the expected ROI in 2009 for the Home Division, assuming the following independent changes to actual data.
1. Variable cost of goods sold is decreased by 6%.
2. Average operating assets are decreased by 10%.
3. Sales are increased by $200,000, and this increase is expected to increase contribution margin by $90,000.
Click here for the solution: Dinkle Manufacturing Company manufactures a variety of tools and industrial equipment
P10-5A Dinkle Manufacturing Company manufactures a variety of tools and industrial equipment. The company operates through three divisions. Each division is an investment center. Operating data for the Home Division for the year ended December 31, 2008, and relevant budget data are as follows.
Actual Comparison with Budget
Sales $1,500,000 $100,000 favorable
Variable cost of goods sold 700,000 60,000 unfavorable
Variable selling and administrative expenses 125,000 25,000 unfavorable
Controllable fixed cost of goods sold 170,000 On target
Controllable fixed selling and administrative expenses 80,000 On target
Average operating assets for the year for the Home Division were $2,500,000 which was also the budgeted amount.
Instructions
(a) Prepare a responsibility report for the Home Division.
(b) Evaluate the manager’s performance. Which items will likely be investigated by top management?
(c) Compute the expected ROI in 2009 for the Home Division, assuming the following independent changes to actual data.
1. Variable cost of goods sold is decreased by 6%.
2. Average operating assets are decreased by 10%.
3. Sales are increased by $200,000, and this increase is expected to increase contribution margin by $90,000.
Click here for the solution: Dinkle Manufacturing Company manufactures a variety of tools and industrial equipment
Thursday, September 10, 2015
Garison Music Emporium carries a wide variety of musical instruments, sound reproduction equipment, recorded music, and sheet music
P13-12 (Warranties and Premiums) Garison Music Emporium carries a wide variety of musical instruments, sound reproduction equipment, recorded music, and sheet music. Garison uses two sales promotion techniques— warranties and premiums— to attract customers.
Musical instruments and sound equipment are sold with a one- year warranty for replacement of parts and labor. The estimated warranty cost, based on past experience, is 2% of sales. The premium is offered on the recorded and sheet music. Customers receive a coupon for each dollar spent on recorded music or sheet music. Customers may exchange 200 coupons and $ 20 for a CD player. Garison pays $ 32 for each CD player and estimates that 60% of the coupons given to customers will be redeemed.
Garison’s total sales for 2010 were $ 7,200,000—$ 5,700,000 from musical instruments and sound reproduction equipment and $ 1,500,000 from recorded music and sheet music. Replacement parts and labor for warranty work totaled $ 164,000 during 2010. A total of 6,500 CD players used in the premium program were purchased during the year and there were 1,200,000 coupons redeemed in 2010.
The accrual method is used by Garison to account for the warranty and premium costs for financial reporting purposes. The balances in the accounts related to warranties and premiums on January 1, 2010, were as shown below.
Inventory of Premium CD Players $ 37,600
Estimated Premium Claims Outstanding 44,800
Estimated Liability from Warranties 136,000
Instructions
Garison Music Emporium is preparing its financial statements for the year ended December 31, 2010. Determine the amounts that will be shown on the 2010 financial statements for the following:
(1) Warranty Expense
(2) Estimated Liability from Warranties
(3) Premium Expense
(4) Inventory of Premium CD Players
(5) Estimated Premium Claims Outstanding
Click here for the solution: Garison Music Emporium carries a wide variety of musical instruments, sound reproduction equipment, recorded music, and sheet music
Musical instruments and sound equipment are sold with a one- year warranty for replacement of parts and labor. The estimated warranty cost, based on past experience, is 2% of sales. The premium is offered on the recorded and sheet music. Customers receive a coupon for each dollar spent on recorded music or sheet music. Customers may exchange 200 coupons and $ 20 for a CD player. Garison pays $ 32 for each CD player and estimates that 60% of the coupons given to customers will be redeemed.
Garison’s total sales for 2010 were $ 7,200,000—$ 5,700,000 from musical instruments and sound reproduction equipment and $ 1,500,000 from recorded music and sheet music. Replacement parts and labor for warranty work totaled $ 164,000 during 2010. A total of 6,500 CD players used in the premium program were purchased during the year and there were 1,200,000 coupons redeemed in 2010.
The accrual method is used by Garison to account for the warranty and premium costs for financial reporting purposes. The balances in the accounts related to warranties and premiums on January 1, 2010, were as shown below.
Inventory of Premium CD Players $ 37,600
Estimated Premium Claims Outstanding 44,800
Estimated Liability from Warranties 136,000
Instructions
Garison Music Emporium is preparing its financial statements for the year ended December 31, 2010. Determine the amounts that will be shown on the 2010 financial statements for the following:
(1) Warranty Expense
(2) Estimated Liability from Warranties
(3) Premium Expense
(4) Inventory of Premium CD Players
(5) Estimated Premium Claims Outstanding
Click here for the solution: Garison Music Emporium carries a wide variety of musical instruments, sound reproduction equipment, recorded music, and sheet music
Wednesday, June 17, 2015
Awtrey Quilting Company makes blankets that it markets through a variety of department stores
Problem 13-23 Effect of Order Quantity on Special Order Decision
Awtrey Quilting Company makes blankets that it markets through a variety of department stores. It makes the blankets in batches of 1,000 units. Awtrey made 20,000 blankets during the prior accounting period. The cost of producing the blankets is summarized here.
AND SO ON
Check:
a. Relevant Cost per Unit: $53
Click here for the solution: Awtrey Quilting Company makes blankets that it markets through a variety of department stores
Awtrey Quilting Company makes blankets that it markets through a variety of department stores. It makes the blankets in batches of 1,000 units. Awtrey made 20,000 blankets during the prior accounting period. The cost of producing the blankets is summarized here.
AND SO ON
Check:
a. Relevant Cost per Unit: $53
Click here for the solution: Awtrey Quilting Company makes blankets that it markets through a variety of department stores
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