For this assignment
- Explain of the key issue and accounting concept
- Analysis by using the FASB codification and cite an appropriate codification
-Logical conclusion: Answers are based on the interpretation / application of the FASB
codification
-Completeness with good format: Business memo (page 1) and the supporting analysis and
explanation (page 2 ~ page 4 or 5)
FASB Codification:
Website:http://aaahq.org/FASB-GASB
These below are the ID and password for the website above
ID: AAA52009PW: YpAA86YNz
the case below is for the directions above
1 usidfdtnrrarcasejustlfiedrwagespdf , Adobe Acrobat Reader DC Flle Edit View Window Help Home Tools ' usidfdtniircase... X [EJGJEIEIQIEDGD 0 Type here to Search IMNQUGG') 75%'E@E?\\/ Requimrl: l Shauldtbe $10 mLIJjnnpaldln employees andlhe $10 million recmvad from WTD be pnesmted gross 0| 1121 in the Company's skinned ofcush aws? How should Ihe Company dassty the cash recelved and paid in its statmmt of cash aws? Does the accounting analysis at mncllmon change for Each oflhe questions above when analyzed ua accoldance mm mm? '1 usidfdtnrrarcasejustlfiedrwagespdf 7 Adobe Acrobat Reader DC Flle Edll Vle'w Wlndow Help Home Tools usidfdlanrSrcase... X @38Q|1/2\\k@ 0 Type here to Search 75% ' Case 1778 Justied Wages Justied Wages Inc, [the \"Compan'f is a prlvately held provider of cloudebased soliware platforms for the Internet ofThmgs (IoT), The Company enables prnduel businesses to become IoT servine businesses, and helps organimtions lannnh, manage, and monetize the deployment oroT worldw1de, In November 2012, the Company secured nancing of $40 million from an independent Investor, WelHoeDo Inc, (WTD), in exchange for the following - S30 mlion for the issue of a new series of its Series E Preferred Stock (Preferred steak), and I 310 millionfur the sale ofits shares of man stock (\"Common Stock"). The purchase of the Preferred Stock and Common Stock were executed within the same transaction. Thus, WTD paid the same value per share for the Common Stock as it did for the Preferred Stock This Is a common practice among venture capltahss, The Company had prevlously awarded common stock to employees as shareebased compensation As required by the terms of the nancing agteanent, the Company conducted a larder offer to repurchase an aggregate nfslo million of common stools 'om its nun-t employees at a peeshare price of 34,53 The eomnion stools reaeqnired from the employees was then sold by the Company to WTD for a like amount of $10 million, The piuehase pane of $453 was mdependmtly negotiated Wlth WTD, The Company acted. as a principal in both transaations with Wm and the employees, That is, the Company did not act as an agent to purchase shares from employees on behalf of WTD, On the basis of an independent thirdeparty valuation the Company concluded that the purchase pane paid to the onpleyees (:10 milhon) exoeeded the fair value of summon stock by 32,5 million, ASC 71872073577 states, in part The amount of cash or other assets transferred (or habilihes incurred) to repurchase an equity award shall be charged to eqinty. to the extent that the mom paid does not exeeedlherairvalue nfthe equity instrinnents repurchased at the repurrhase date Any exeessonbereoinehaseonee overthefairvnlueoftheinsmnnmlsrepmchasodshnbe reoognized as additional compensation nnst Pursuant to the guidance above, the Company rerouted a debit to treasury stock and expense in the amounts of $7 4 million (representing the air value oflhe common stock) and $2 6 million (representing the exness of purchase pane over n value), respectively, and a rredii to cash
