Parsons Limited established a share appreciation rights program that entitled its new president, Brandon Sutton, to receive cash for the difference between the shares' fair value and a pre-established price of $32 (also fair value on December 31, 2022), on 50,000 SARS. The date of grant is December 31, 2022, and the required employment (service) period is four years. The president exercised all of the SARS on December 31, 2027. The shares' fair value fluctuated as follows: December 31, 2023, $36; December 31, 2024, $39; December 31, 2025, $45: December 31, 2026, $36; and December 31, 2027. $48. The company recognizes the SARS in its financial statements. Assume that Parsons follows ASPE. (a) Prepare a five-year (2023 to 2027) schedule of compensation expense pertaining to the 50.000 SARs granted to Brandon. (Enter negative amounts using either a negative sign preceding the number eg.-45 or parentheses eg. (45)) Schedule of Compensation Expense-Share Appreciation Rights (50,000) Cumulative Compensation Recognizable Date 12/31/23 12/31/24 12/31/25 Fair Value $36 39 45 Pre- established Price $32 32 32 4 $ Percentage Accrued % % Compensi Accrued Date

Parsons Limited established a share appreciation rights program that entitled its new president, Brandon Sutton, to receive cash for the difference between the shares' fair value and a pre-established price of $32 (also fair value on December 31, 2022), on 50,000 SARS. The date of grant is December 31, 2022, and the required employment (service) period is four years. The president exercised all of the SARS on December 31, 2027. The shares' fair value fluctuated as follows: December 31, 2023, $36; December 31, 2024, $39; December 31, 2025, $45: December 31, 2026, $36; and December 31, 2027. $48. The company recognizes the SARS in its financial statements. Assume that Parsons follows ASPE. (a) Prepare a five-year (2023 to 2027) schedule of compensation expense pertaining to the 50.000 SARs granted to Brandon. (Enter negative amounts using either a negative sign preceding the number eg.-45 or parentheses eg. (45)) Schedule of Compensation Expense-Share Appreciation Rights (50,000) Cumulative Compensation Recognizable Date 12/31/23 12/31/24 12/31/25 Fair Value $36 39 45 Pre- established Price $32 32 32 4 $ Percentage Accrued % % Compensi Accrued Date

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter15: Contributed Capital

Section: Chapter Questions

Problem 8RE: On January 2, 2019, Brust Corporation grants its new CFO 2,000 restricted share units. Each of the...

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On January 2, 2019, Brust Corporation grants its new CFO 2,000 restricted share units. Each of the time-vested restricted share units entitles the CFO to receive one share of Brust common stock if she remains an employee of the company for 4 years. On January 2, 2019, shares of Brusts 1 par value common are trading at 29.50 per share. The company estimates that the CFO will complete all 4 years of required service with the company. Prepare the journal that Brust should make each year to account for the restricted share units.
The company established a stock appreciation rights program for the president. The program entitled the president to receive cash for the difference between the common shares fair value and the pre-established price of $20 which was the fair value on January 1, 2021 on 20,000 SARS. The date of the grant was January 1, 2021 and the required employment (service period) is two years. Assume the common shares' fair value fluctuated as follows: December 31, 2021, $24; December 31, 2022, $23 and December 31, 2023, $26. Assume, also, that the president exercised half of the SARS on January 1, 2024. Use ASPE but indicate how IFRS determines the value of Share Appreciation Rights|
On January 1, 2022, Maris Company issued share appreciation rights to its president exercisable for one year beginning January 1, 2024 provided that the president is still in the employ of the company at that date of exercise. Each right provides for a cash payment equal to the excess of the entity’s share price over P50. The equivalent number of shares for share appreciation rights will be based on the level of sales at the date of exercise. The number of equivalent shares is 20,000 if the level of sales is P4,000,000 to P6,000,000 and 30,000 shares if the level of sales is over P6,000,000. The actual sales achieved totaled P5,000,000 in 2022 and P7,000,000 in 2023. The share prices are P90 in 2022 and P85 in 2023. What amount should be reported as compensation expense for 2023? 250,000 650,000 525,000 850,000
On January 1, 2020, DEF Co. granted its president 50,000 share appreciation rights. The rights are exercisable immediately and expire on December 31, 2021. On exercise, the president is entitled to receive cash for the excess of the share market price on exercise date over the market price on grant date. The president did not exercise any of the rights in 2020. The market price of the share was P100 on January 1, 2020 and P115 on December 31, 2021. The president exercised the rights on December 31, 2021 when the market price was P110. As a result of the share appreciation rights, FAITH Co. shall recognize gain on reversal of share appreciation rights in 2021 at?
Concord Company establishes a stock-appreciation rights program that entitles its new president Ben Davis to receive cash for the difference between the market price of the stock and a pre-established price of $33 (also market price) on December 31, 2021, on 37,700 SARs. The date of grant is December 31, 2021, and the required employment (service) period is 4 years. President Davis exercises all of the SARS in 2027. The fair value of the SARS is estimated to be $6 per SAR on December 31, 2022; $10 on December 31, 2023; $14 on December 31, 2024; $6 on December 31, 2025; and $17 on December 31, 2026. (a) Prepare a 5-year (2022-2026) schedule of compensation expense pertaining to the 37,700 SARS granted president Davis. (If the compensation decreases from prior year enter the amount as a negative number in the table eg -25,000 or (25,000)) Cumulative Compensation Recognizable Date 12/31/22 $ 12/31/23 12/31/24 12/31/25 Fair Value Percentage Accrued % $ Compens
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On January 1, 2023, Pyxis Company issued share appreciation rights to its president exercisable for one year beginning January 1, 2025 provided that the president is still in the employ of the company at that date of exercise. Each right provides for a cash payment equal to the excess of the entity’s share price over P50. The equivalent number of shares for share appreciation rights will be based on the level of sales at the date of exercise. The number of equivalent shares is 20,000 if the level of sales is P4,000,000 to P6,000,000 and 30,000 shares if the level of sales is over P6,000,000. The actual sales achieved totaled P5,000,000 in 2023 and P7,000,000 in 2024. The share prices are P70 in 2023 and P65 in 2024. What is the compensation expense for 2023? ANSWER: 200,000 What is the compensation expense for 2024? ANSWER: 150,000 Show full solution
On January 1, 2018 Weins Inc. granted 100,000 stock appreciation rights (SARs) to its executives. (Weins Inc uses IFRS) Each SAR entitled its holder to receive cash equal to the difference between the market price of the common share and the benchmark price of $12. The SARs vested after two years and expired on Dec. 31, 2021. On January 1, 2020, 10,000 SARs are exercised. The market price of the shares remained at $22. On January 1, 2021, 50,000 SARS are exercised. The market price of the shares remained at $15 The remaining SARs expired on December 31, 2021 Pertinent stock-related data are listed below: Date Fair value each SAR Market price of share 1-Jan-18 $11 31-Dec-18 $7 $15 31-Dec-19 $6 $14 31-Dec-20 $8 $22 31-Dec-21 $5 $15 Required: Prepare journal entries for the following: December 31, 2018, to record compensation expense. December 31, 2019, to record compensation expense. December 31, 2020, to record compensation expense.…
On January 1, Year 1, Hotdog Inc. granted the president 50,000 share appreciation rights for past service. These rights are exercisable immediately and expire on December 31, Year 2. On exercise date, the president is entitled to receive cash for the excess of the share market price over the share market price on the grant date. The president did not exercise any of the rights during Year 1. The market price of the share was P100 on January 1, Year 1 and P115 on December 31, Year 1. The grantee exercised the rights on December 31, Year 2 when the market price was P110. As a result of the share appreciation rights, what amount should be recognized as gain on reversal of share appreciation rights in Year 2? A. 500,000 B. 250,000 C. 750,000 D. 0
On December 31, 2016, Wesley Inc. granted 4,000 share appreciation rights (SARs) to its employees. When exercised, each SAR paid out the current market price of the common shares less $34 (the market price of the common shares on the date of the SAR grant). The vesting period ended on December 30, 2018, and the exercise period ended on December 31, 2019. Information on Wesley Inc.'s plan is as follows: Average cash paid out on exercise Number of SARs exercised Year end Dec 31, 2016 Dec 31, 2017 Dec 31, 2018 Dec 31, 2019 Fair value per SAR $ 8 15 22 Estimated number of SARs vesting 90% 93% 92% (actual) $18 14 2,100 1,580 Required: Prepare all journal entries for the years ended December 31, 2017, through December 31, 2019, inclusive.
Togo Incorporation started a share appreciation plan on January 1, 2022, when it granted 50,000 rights to its executives. The vesting period is 2 years. The stock appreciation rights are settled for cash. The plan expires on January 1, 2024. The fair value of Togo's SARS for the years ended December 31, 2022, and 2023, are as follows: (Click the icon to view the additional information.) All rights are exercised on January 1, 2024, when their fair value is $7 and the market price of the stock is $35 per share. What is the compensation expense in 2022 and in 2023? Prepare the journal entries to record the SAR plan. Determine the compensation expense in 2022. Compensation expense in 2022 = Determine the compensation expense in 2023. Compensation expense in 2023 = Now, prepare the journal entry to record the compensation expense for the year 2022. (Record debits first, then credits. Exclude explanations from any journal entries.) Account Next, prepare the journal entry to record the…
On December 31, 2016, Wesley Inc. granted 4,000 share appreciation rights (SARS) to its employees. When exercised, each SAR paid out the current market price of the common shares less $34 (the market price of the common shares on the date of the SAR grant). The vesting period ended on December 30, 2018, and the exercise period ended on December 31, 2019. Information on Wesley Inc.'s plan is as follows: Average cash paid out on exercise Estimated Fair value per SAR number of SARS vesting Number of Year end SARS exercised $ 8 Dec 31, 2016 Dec 31, 2017 Dec 31, 2018 Dec 31, 2019 90% 15 93% 22 92% (actual) $18 2,100 14 1,580 Required: Prepare all journal entries for the years ended December 31, 2017, through December 31, 2019, inclusive. (