Microsoft provides compensation to executives in the form of a variety of incentive compensation plans, including restricted stockaward grants. The following is an excerpt from a disclosure note from Microsoft's 2020 annual report:Note 18 Employee Stock and Savings Plans (in part)Stock awards entitle the holder to receive shares of Microsoft common stock as the award vests. Stock awards generally vest over afive-year period.... During fiscal year 2020, the following activity occurred under our plans:Stock awards:Nonvested balance, beginning of year.GrantedVestedForfeitedNonvested balance, end of yearShares (in)millions)14753(65)(9)Compensation expense in fiscal 2020126Weighted AverageGrant-Date FairValue$78.49140.4975.3590.30$ 105.23Required:If all awards are granted, acquired, vested, and forfeited evenly throughout the year, what is the compensation expense in fiscal 2020pertaining to the previous and current stock awards? Assume forfeited shares were granted evenly throughout the three previousyears.Note: Enter your answer in millions rounded to 1 decimal place (i.e., 5,500,500 should be entered as 5.5).

Given in the question: The vesting period is 5 Years The assumption which is required to be made is…

Required: If all awards are granted, acquired, vested, and forfeited evenly throughout the year, what is the compensation expense in fiscal 2020 pertaining to the previous and current stock awards? Assume forfeited shares were granted evenly throughout the three previous years. Note: Enter your answer in millions rounded to 1 decimal place (i.e., 5,500,500 should be entered as 5.5). Compensation expense in fiscal 2020

Required: If all awards are granted, acquired, vested, and forfeited evenly throughout the year, what is the compensation expense in fiscal 2020 pertaining to the previous and current stock awards? Assume forfeited shares were granted evenly throughout the three previous years. Note: Enter your answer in millions rounded to 1 decimal place (i.e., 5,500,500 should be entered as 5.5). Compensation expense in fiscal 2020

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

Chapter16: Retained Earnings And Earnings Per Share

Section: Chapter Questions

Problem 25P: The controller of Red Lake Corporation has requested assistance in determining income, basic...

See similar textbooks

Similar questions

Microsoft provides compensation to executives in the form of a variety of incentive compensation plans, including restricted stock award grants. The following is an excerpt from a disclosure note from Microsoft's 2017 annual report: Note 20 Employee Stock and Savings Plans (in part) Stock awards are grants that entitle the holder to shares of common stock as the award vests. Our stock awards generally vest over a five-year period.... During fiscal year 2017, the following activity occurred under our plans: Weighted Shares Average ($ in Grant-Date millions) Fair Value Stock awards: Nonvested balance, beginning of year Granted Assumed in acquisitions 194 $36.92 84 55.64 23 59.09 37.36 Vested (80) (20) Forfeited 43.71 Nonvested balance, end of year 201 $ 46.32 Required: If all awards are granted, acquired, vested, and forfeited evenly throughout the year, what is the compensation expense in fiscal 2017 pertaining to the previous and current stock awards? Assume forfeited shares were…
Microsoft provides compensation to executives in the form of a variety of incentive compensation plans, including restricted sto award grants. The following is an excerpt from a disclosure note from Microsoft's 2020 annual report: Note 18 Employee Stock and Savings Plans (in part) Stock awards entitle the holder to receive shares of Microsoft common stock as the award vests. Stock awards generally vest o five-year period.... During fiscal year 2020, the following activity occurred under our plans: Stock awards: Nonvested balance, beginning of year Granted Vested Forfeited Nonvested balance, end of year Required: Shares (in millions) 147 53 Weighted Average Grant-Date Fair Value $ 78.49 140.49 75.35 (65) (9) 126 90.30 $ 105.23 If all awards are granted, acquired, vested, and forfeited evenly throughout the year, what is the compensation expense in fiscal pertaining to the previous and current stock awards? Assume forfeited shares were granted evenly throughout the three previou years.…
As part of its stock-based compensation package, International Electronics granted 61 million stock appreciation rights (SARs) to top officers on January 1, 2024. • At exercise, holders of the SARS are entitled to receive cash or stock equal in value to the excess of the market price at exercise over the share price at the date of grant. • The SARS cannot be exercised until the end of 2027 (vesting date) and expire at the end of 2029. • The $1 par common shares have a market price of $65 per share on the grant date. • The fair value of the SARS, estimated by an appropriate option pricing model, is $5.00 per SAR at January 1, 2024. • The fair value re-estimated at December 31, 2024, 2025, 2026, 2027, and 2028, is $6.00, $5.00, $6, $2.00, and $5.00, respectively. • All recipients are expected to remain employed through the vesting date. Required: .to 3. Prepare the appropriate journal entries pertaining to the SARS on January 1, 2024 and December 31, 2024-December 31, 2027. The SARS…
Microsoft Corporation's disclosure notes for the year ending June 30, 2020, Included the following regarding its $0.00000625 par common stock Employee Stock Purchase Plan-We have an ESPP for all eligible employees. Shares of our common stock may be purchased by employees at three-month intervals at 90% of the fair market value on the last trading day of each three-month period. Employees may purchase shares having a value not exceeding 15% of their gross compensation during an offering period. Employees purchased the following shares during the periods presented (Shares in millions) Year Ended June 30, Shares purchased i Average price per share 2020 2019 11 $142.22 $104.85 2018 15 $76.48 As of June 30, 2020, 96 million shares of our common stock were reserved for future issuance through the ESPP Required: Prepare the journal entry that summarizes Microsoft's employee share purchases for the year ending June 30, 2020 Note: If no entry is required for a transection/event, select "No…
Microsoft Corporation's disclosure notes for the year ending June 30, 2020, Included the following regarding its $0.00000625 par common stock Employee Stock Purchase Plan-We have an ESPP for all eligible employees. Shares of our common stock may be purchased by employees at three-month intervals at 90% of the fair market value on the last trading day of each three-month period. Employees may purchase shares having a value not exceeding 15% of their gross compensation during an offering period. Employees purchased the following shares during the periods presented (Shares in millions) Year Ended June 30, 2020 2019 11 $104.85 2018 Shares purchased Average price per share 13 $76.48 $142,22 As of June 30, 2020, 96 milion shares of our common stock were reserved for future issuance through the ESPP Required: Prepare the journal entry that summanzes Microsoft's employee share purchases for the year ending June 30, 2020 Note: If no entry is required for a transaction/event, select "No Journal…
The controller of Red Lake Corporation has requested assistance in determining income, basic earnings per share, and diluted earnings per share for presentation on the companys income statement for the year ended September 30, 2020. As currently calculated, Red Lakes net income is 540,000 for fiscal year 2019-2020. Your working papers disclose the following opening balances and transactions in the companys capital stock accounts during the year: 1. Common stock (at October 1, 2019, stated value 10, authorized 300,000 shares; effective December 1, 2019, stated value 5, authorized 600,000 shares): Balance, October 1, 2019issued and outstanding 60,000 shares December 1, 201960,000 shares issued in a 2-for-l stock split December 1, 2019280,000 shares (stated value 5) issued at 39 per share 2. Treasury stockcommon: March 3, 2020purchased 40,000 shares at 38 per share April 1, 2020sold 40,000 shares at 40 per share 3. Noncompensatory stock purchase warrants, Series A (initially, each warrant was exchangeable with 60 for 1 common share; effective December 1, 2019, each warrant became exchangeable for 2 common shares at 30 per share): October 1, 201925,000 warrants issued at 6 each 4. Noncompensatory stock purchase warrants, Series B (each warrant is exchangeable with 40 for 1 common share): April 1, 202020,000 warrants authorized and issued at 10 each 5. First mortgage bonds, 5%, due 2029 (nonconvertible; priced to yield 5% when issued): Balance October 1, 2019authorized, issued, and outstandingthe face value of 1,400,000 6. Convertible debentures, 7%, due 2036 (initially, each 1,000 bond was convertible at any time until maturity into 20 common shares; effective December 1, 2019, the conversion rate became 40 shares for each bond): October 1, 2019authorized and issued at their face value (no premium or discount) of 2,400,000 The following table shows the average market prices for the companys securities during 2019-2020: Adjusted for stock split Required: Prepare a schedule computing: 1. the basic earnings per share 2. the diluted earnings per share that should be presented on Red Lakes income statement for the year ended September 30, 2020 A supporting schedule computing the numbers of shares to be used in these computations should also be prepared. Assume an income tax rate of 30%.
As part of its stock-based compensation package, International Electronics granted 52 million stock appreciation rights (SARS) to top officers on January 1, 2024. • At exercise, holders of the SARS are entitled to receive cash or stock equal in value to the excess of the market price at exercise over the share price at the date of grant. • The SARS cannot be exercised until the end of 2027 (vesting date) and expire at the end of 2029. • The $1 par common shares have a market price of $62 per share on the grant date. O The fair value of the SARS, estimated by an appropriate option pricing model, is $6.50 per SAR at January 1, 2024. The fair value re-estimated at December 31, 2024, 2025, 2026, 2027, and 2028, is $7.50, $6.50, $6, $1.90, and $3.00, respectively. • All recipients are expected to remain employed through the vesting date. Required: 1. to 3. Prepare the appropriate journal entries pertaining to the SARS on January 1, 2024 and December 31, 2024-December 31, 2027. The SARS…
As part of its stock-based compensation package, International Electronics (IE) granted 46 million stock appreciation rights (SARs) to top officers on January 1, 2024. At exercise, holders of the SARs are entitled to receive stock equal in value to the excess of the market price at exercise over the share price at the date of grant. The SARs cannot be exercised until the end of 2027 (vesting date) and expire at the end of 2029. The $1 par common shares have a market price of $46 per share on the grant date. The fair value of the SARs, estimated by an appropriate option pricing model, is $3 per SAR at January 1, 2024. The fair value re-estimated at December 31, 2024, 2025, 2026, 2027, and 2028, is $4, $3, $4, $2.50, and $3, respectively. All recipients are expected to remain employed through the vesting date. Required: 1-a.Will the SARs be reported as debt or as equity? 1-b to 4.Prepare the appropriate journal entries pertaining to the SARs on January 1, 2024 and December 31,…
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|
Heidi Software 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, 2024, that permit executives to acquire 18 million of the company's $1 par common shares within the next five years, but not before December 31, 2025 (the vesting date). • The exercise price is the market price of the shares on the date of grant, $31.00 per share. The fair value of the 18 million options, estimated by an appropriate option pricing model, is $7 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, 2024. 3. Prepare the appropriate journal entry to record compensation expense on December 31, 2024. 4. Prepare the appropriate journal entry to record compensation expense on December 31, 2025. Complete this question by entering…
As part of its stock-based compensation package, International Electronics granted 24 million stock appreciationrights (SARs) to top officers on January 1, 2018. At exercise, holders of the SARs are entitled to receive stockequal in value to the excess of the market price at exercise over the share price at the date of grant. The SARscannot be exercised until the end of 2021 (vesting date) and expire at the end of 2023. The $1 par common shareshave a market price of $46 per share on the grant date. The fair value of the SARs, estimated by an appropriateoption pricing model, is $3 per SAR at January 1, 2018. The fair value reestimated at December 31, 2018, 2019,2020, 2021, and 2022, is $4, $3, $4, $2.50, and $3, respectively. All recipients are expected to remain employedthrough the vesting date.Required:1. Prepare the appropriate journal entry to record the award of SARs on January 1, 2018. Will the SARs bereported as debt or equity?2. Prepare the appropriate journal entries pertaining…
Ray Holt Corporation has retained you as a consultant on accounting policies and procedures. During 2019, the company engaged in a number of treasury stock transactions, having foreseen an opportunity to report its treasury stock as an asset and to recognize a profit in trading its own stock. The transactions were as follows: 1. Reacquired 120 shares of its $10 par common stock at $20 per share. The shares had originally been issued at $20 per share. 2. Reacquired 165 shares of its $10 par common stock at $23 per share. The shares had originally been issued at $20 per share. 3. Reacquired 45 shares of its $100 par preferred stock at $138 per share. The shares had originally been issued at $185 per share. 4. Sold all common treasury shares held at $27 per share. 5. Reacquired 160 shares of its $100 par preferred stock at $135 per share. The shares had originally been issued at $185 per share. 6. Retired all preferred shares held in the treasury. Required: 1. Next…