Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN: 9781337788281
Author: James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher: Cengage Learning
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Question
Chapter 15, Problem 3C
1.
To determine
Compare and differentiate the accounting at the date the stock is issued for the non-compensatory share option plan with that for a compensatory share option plan
2.
To determine
Identify the journal entry that should be recorded for the compensatory share option plan at the date of the grant.
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Subscriptions receivable from sale of shares which are not collectible currently shall be presented asRequired to answer. Single choice.
a. current assets
b. deduction from the related subscribed share capital in the shareholder's equity section
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d. other asset.
Which statement is incorrect regarding equity-settled share-based payment transactions?
A. the issuance of shares to employees with say, a two year vesting period is considered to relate to services over the vesting period.
B. the issuance of shares or rights to shares requires an increase in a component of equity
C. the fair value of a share-based payment transaction is determined at the date of exercise.
D. the issuance of fully vested shares, or rights to shares, is presumed to relate to past service, requiring the full amount of the grant-date fair value to be expensed immediately.
Provided the specified vesting conditions, if any, are met, share-based payment arrangement is an agreement between the entity and another party that entities the other party to receive
A. equity instruments of the entity or another group entity
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Subscription receivable and other receivables from sale of shares which are collectible currently shall be presented as
Choices;
current assets
deduction from the related subscribed share capital
long-term investment
other assets
Chapter 15 Solutions
Intermediate Accounting: Reporting And Analysis
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 - Cary Corporation has 50,000 shares of 10 par...Ch. 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 - On January 1, 2019, Phoenix Corporation adopts a...Ch. 15 - On January 2, 2019, Brust Corporation grants its...Ch. 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 - Restricted Share Units On January 2, 2019, Dekker...Ch. 15 - Prob. 10ECh. 15 - Convertible Preferred Stock On January 2, 2019,...Ch. 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 - Contributed Capital Adams Companys records provide...Ch. 15 - Prob. 17ECh. 15 - Treasury Stock, Cost and Par Value Methods On...Ch. 15 - Treasury Stock, No Par Propst-Steele Production...Ch. 15 - Subscriptions On August 3, 2019, the date of...Ch. 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 - Comprehensive Young Corporation has been operating...Ch. 15 - Comprehensive The shareholders equity section of...Ch. 15 - Treasury Stock Analysis Ray Holt Corporation has...Ch. 15 - Comprehensive Byrd Companys Contributed Capital...Ch. 15 - Prob. 13PCh. 15 - Prob. 14PCh. 15 - Reconstruct Journal Entries At the end of its...Ch. 15 - Treasury Stock, Cost Method Bush-Caine Company...Ch. 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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- Preferred stock that may be retired by the corporation at its option is known as: a. convertible b. redeemable c. cumulative d. callablearrow_forwardWhen share options issued to employees are vested prior to the predetermined vesting date, the entity shall A.do nothing B.make a transfer among equity components C.recognize additional expense for the unamortized balance D. recognize a gain for the unamortized balancearrow_forwardMatching Type. Choose the correct answer in the box provided. These are distributions of the earnings of the corporation in the form of the corporation's own shares. * It is the procedure of restating assets, liabilities and share capital balances at its fair value for the purpose of eliminating deficit. * Share option is the best example of this kind of share-based compensation plan. * The date the liability for dividends must be recognized *arrow_forward
- When a corporation first decides to issue stock to the public, it engages in a(n) Question 20 options: secondary offering. initial public offering. seasoned equity offering.arrow_forwardAccording to IFRS, once the total compensation is measured at the date of grant A. It can be changed in future periods related to a change in market conditions B. It can be changed to reflect the rise or fall in the market price of the company's ordinary shares C. A company is permitted to adjust tge number of share options expected to the actual number of instruments vested D. All of the choices are correctarrow_forwardAn offering of a new issue of shares to existing shareholders who may purchase new shares in proportion to their current ownership position is known as a: Select one: a. Rights issue b. Initial Public Offering (IPO) c. Dividend Reinvestment Plan (DRP) d. Private Placementarrow_forward
- Statement 1: Upon issue of share rights, the issuing corporation records the transaction by preparing a journal entry to recognize the additional number of shares that may be acquired through the exercise.Statement 2: When preference shares are issued with detachable warrants, the proceeds should be allocated between the preference shares and the warrants based on the fair values of the two securities at the time of issuance. a) Both statements are true. b) Both statements are false. c) Statement I is true; Statement II is false. d) Statement I is false; Statement II is true.arrow_forwardDiscuss the accounting treatment, if any, that should be given to each of the following items in computing earnings per share of ordinary shares for financial statement reporting. a. outstanding preference shares issued at a premium with a par value liquidation right. b. the exercise at a price below market value but above book value of an ordinary share option issued during the current fiscal year to officers of the corporation. c. the replacement of a machine immediately prior to the close of the current fiscal year at a cost of 20% above the original cost of the replaced machine. the new machine will perform the same function as the old machine that was sold for its book value.arrow_forward1. Under IFRS 2 Share-Based Payment, what is the basis for measurement of share options? A. Fair value at the date of grant. B. Fair value at each reporting date. C. Expected fair value at the date pf exercise. D. Intrinsic value at each reporting date. 2. Under IFRS 2, Share-Based Payment, the value of the options that lapse after vesting shall A. be credited to expense during the period the options lapse. B. be credited to income during the period that the options lapse C. remain in equity. D. be converted into a liability. 3. When should the compensation expense be recorded as a result of share options granted by the enterprise to its employees?A. During the year of grant B. During the year that the options ultimately vest C. During the years when services are required to be rendered by the employees D. During the year when the option first becomes exercisablearrow_forward
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