- •99. What is the entry to record the expiration of 10% of the options on December 31, 20010?
- •118. Gear Corporation had the following common stock record during the current calendar year:
- •Required:
- •Required:
- •Required:
- •Required:
- •Required:
- •Required:
- •Required:
- •Required:
- •Required:
- •Required:
- •Required:
- •Required:
- •137. On January 1, 2006, Shamu Corporation had 100,000 shares of common stock outstanding. The following transactions occurred during 2006:
- •Required:
- •Required:
- •Required:
- •Required:
- •In its 2004 Annual Report to shareholders, Comfort Stores disclosed the following footnote about its eps:
- •163. What is restricted stock? Describe how compensation expense is determined and recorded for a restricted stock plan.
Required:
-
Assume that no shares are forfeited. Determine the total compensation cost pertaining to the restricted shares.
-
Prepare the appropriate journal entries related to the restricted stock through December 31, 2007.
Answer:
-
($ in millions)
(1.)
$10 x 10 shares = $100
(2.)
December 31, 2006
Compensation expense ($100/2)
50
Paid-in capital-restricted stock
50
December 31, 2007
Compensation expense ($100/2)
50
Paid-in capital-restricted stock
50
Paid-in capital-restricted stock
100
Common stock (10 x $5)
50
Paid-in capital-excess of par
50
Learning Objective: 1 Level of Learning: 3
124. On January 1, 2006, Jeans-R-Us Company awarded 15 million of its $1 par common shares to key personnel, subject to forfeiture if employment is terminated within 3 years. On the date of the grant, the stock had a market price of $3 per share.
Required:
-
Determine the total compensation cost pertaining to the restricted shares.
-
Prepare the appropriate journal entry to record the award on January 1, 2006.
-
Prepare the appropriate journal entry to record compensation expense on December 31, 2006.
Answer:
($ in millions)
(1.) $3 x 15 shares = $45
(2.) NO ENTRY
-
(3.)
Compensation expense ($45/3)
15
Paid-in capital-restricted stock
15
Learning Objective: 1 Level of Learning: 3
125. On January 1, 2006, Jeans-R-Us Company awarded 15 million of its $1 par common shares to key personnel, subject to forfeiture if employment is terminated within 3 years. On the date of the grant, the stock had a market price of $3 per share.
Required:
-
Determine the total compensation cost pertaining to the restricted shares.
-
Prepare the appropriate journal entry to record the award on January 1, 2006.
-
Prepare the appropriate journal entry to record compensation expense on December 31, 2006.
-
Prepare the appropriate journal entry to record compensation expense on December 31, 2007.
-
Prepare the appropriate journal entry to record compensation expense on December 31, 2008.
-
Prepare the appropriate journal entry to record the lifting of restrictions on December 31, 2008.
Answer:
($ in millions)
(1.) $3 x 15 shares = $45
(2.) NO ENTRY
-
(3.)
Compensation expense ($45M/3)
15
Paid-in capital-restricted stock
15
(4.)
Compensation expense ($45M/3)
15
Paid-in capital-restricted stock
15
(5.)
Compensation expense ($45M/3)
15
Paid-in capital-restricted stock
15
(6.)
Paid-in capital-restricted stock
45
Common stock
15
Paid-in capital-excess of par
30
Learning Objective: 1 Level of Learning: 3
126. Hammerstein Corporation offers a variety of share-based compensation plans to employees. Under its restricted stock award plan, the company, on January 1, 2006, granted 2 million of its $1 par common shares to various division managers. The shares are subject to forfeiture if employment is terminated within 4 years. The common shares have a market price of $20 per share on the award date.