Q- Search in Document Acct Table Design Layout Home Review View Tell me what you want to do + Share Insert Design Layout References Mailings Arial 12. AA A AS A B 1 v U - abc X abc X, XA == + T AaBbcode Aabende cDc cDd bt Paste Normal No Spacing Heading 1 Heading 2 Title Styles Panc ACCT problem - Dilutive Securities and EPS 1. Futuristic Products Company established a stock appreciation rights (SARS) program which entitles its new president Jill Castleberry to receive cash for the difference between the market price of the stock and a preestablished price of $30 a share on 20,000 shares. The date of grant is December 31, 2014 and requires the president remain in her position during 2015, 2016 and 2017. As of January 1, 2018, the SARS are exercisable for 5 years before they lapse. Jill exercises the SARS on January 2, 2020. The company has adopted the fair value method of expensing its SARs to employees and it has run the Black-Scholes pricing model for them. The company controller has also updated the pricing model through the date that the SARs were exercised. The "total" fair value (i.e., the preestablished price has not been deducted yet) for all SARs per the original run of the model (and the updated runs) are shown below. Date Estimated Total Fair Value of SARs /per share 12/31/2014 $30 12/31/2015 36 12/31/2016 39 12/31/2017 45 12/31/2018 36 21/31/2019 48 1/2/2020 48 A. Prepare a Schedule of Compensation Expense pertaining to the SARs for the period 2015-2020. B. Prepare the journal entry for compensation expense in 2014, 2018, and 2019. Page 1 of 3 657 words English (United States) = - + 135% Q Search in Document Acct Table Design Layout Home Review View Tell me what you want to do + Share Insert Design Layout References Mailings Arial 12. AA A- A B 1 v U - abc X abe X2 X A = 4 + 1 AaBbcende Aabende AaBbCcDc AaBbccdee AaBbc Paste Normal No Spacing Heading 1 Heading 2 Title Styles Panc 2. On November 2, 2014, the stockholders of Moore Company voted to adopt a stock options plan for Moore's key officers. Options were granted to officers of Moore as of January 1, 2015, and at that time the option price was set at $30. According to terms of the option agreement, the officers of the company can purchase 36,000 shares as of Jan. 1. 2018. The shares represent compensation for 2015, 2016 and 2017. The options lapse on Dec. 31, 2018. On Febr. 1, 2018 options for 18,000 shares were exercised. The remaining options lapsed because the executives decided not to exercise. Par value of the stock is $10. The company has adopted the fair value method of expensing its stock options to employees and it has run the Black-Scholes option pricing model for these options. The company controller has also updated the pricing model through the date that the options were exercised. The "total" fair value (i.e., the exercise price has not been deducted yet) for all options per the original run of the model and the updated runs) are shown below. Estimated Total Fair Value of Options/per option Options Fair Value on Grant Date of 1/1/2015 $35 Options Fair Value on 12/31/2015 $36 Options Fair Value on 12/31/2016 $38 Options Fair Value on 12/31/2017 $40 Option exercise date Fair Value on 2/1/2018 $44 A. What is the Total Compensation Expense (for all years) that the company will record that is related to these stock options? B. Make any necessary journal entries related to this stock option for 2015-2018. Page 2 of 3 657 words X English (United States) - + 135% Q Search in Document Acct Table Design Layout Home Insert Design Layout References Mailings Review View Tell me what you want to do + Share Arial 12 - A - A A A- == + T AaBbcende Aabende cDc cDd bt Paste B 1 v U - abcx X2 X A. 15. Normal No Spacing Heaving 1 Heading 2 Title Styles Panc 3. At January 1, 2017 the Leon White Company had 400,000 shares of common stock outstanding. The only 2017 common stock related transaction occurred on November 1, 2017 when White sold an additional 100,000 shares. Net income for 2017 was $2,565,000; the income tax rate was 40%. White had the following securities on its books for the year ended December 31, 2017: (a) 20,000 shares of $100 par 10% nonconvertible, cumulative preferred stock. Stock was sold at 102. (b) 30,000 shares of 8% convertible, cumulative preferred stock, par $100, sold at 110. Each share of preferred stock is convertible into two shares of common. (c) $2,000,000 face value of 8% nonconvertible bonds payable sold at par. (d) $3,000,000 face value of 6% convertible bonds payable sold at par. Each $1,000 bond is convertible into 20 shares of common. (e) Options to purchase 10,000 common stock shares were issued Jan. 1, 2017. Option price was $30 per share; market value at end of year, $40; average market value Jan. 1 to December 31, 2017, $35. Compute the required EPS figure(s) for 2017. Page 3 of 3 657 words X English (United States) = - + 135% Q- Search in Document Acct Table Design Layout Home Review View Tell me what you want to do + Share Insert Design Layout References Mailings Arial 12. AA A AS A B 1 v U - abc X abc X, XA == + T AaBbcode Aabende cDc cDd bt Paste Normal No Spacing Heading 1 Heading 2 Title Styles Panc ACCT problem - Dilutive Securities and EPS 1. Futuristic Products Company established a stock appreciation rights (SARS) program which entitles its new president Jill Castleberry to receive cash for the difference between the market price of the stock and a preestablished price of $30 a share on 20,000 shares. The date of grant is December 31, 2014 and requires the president remain in her position during 2015, 2016 and 2017. As of January 1, 2018, the SARS are exercisable for 5 years before they lapse. Jill exercises the SARS on January 2, 2020. The company has adopted the fair value method of expensing its SARs to employees and it has run the Black-Scholes pricing model for them. The company controller has also updated the pricing model through the date that the SARs were exercised. The "total" fair value (i.e., the preestablished price has not been deducted yet) for all SARs per the original run of the model (and the updated runs) are shown below. Date Estimated Total Fair Value of SARs /per share 12/31/2014 $30 12/31/2015 36 12/31/2016 39 12/31/2017 45 12/31/2018 36 21/31/2019 48 1/2/2020 48 A. Prepare a Schedule of Compensation Expense pertaining to the SARs for the period 2015-2020. B. Prepare the journal entry for compensation expense in 2014, 2018, and 2019. Page 1 of 3 657 words English (United States) = - + 135% Q Search in Document Acct Table Design Layout Home Review View Tell me what you want to do + Share Insert Design Layout References Mailings Arial 12. AA A- A B 1 v U - abc X abe X2 X A = 4 + 1 AaBbcende Aabende AaBbCcDc AaBbccdee AaBbc Paste Normal No Spacing Heading 1 Heading 2 Title Styles Panc 2. On November 2, 2014, the stockholders of Moore Company voted to adopt a stock options plan for Moore's key officers. Options were granted to officers of Moore as of January 1, 2015, and at that time the option price was set at $30. According to terms of the option agreement, the officers of the company can purchase 36,000 shares as of Jan. 1. 2018. The shares represent compensation for 2015, 2016 and 2017. The options lapse on Dec. 31, 2018. On Febr. 1, 2018 options for 18,000 shares were exercised. The remaining options lapsed because the executives decided not to exercise. Par value of the stock is $10. The company has adopted the fair value method of expensing its stock options to employees and it has run the Black-Scholes option pricing model for these options. The company controller has also updated the pricing model through the date that the options were exercised. The "total" fair value (i.e., the exercise price has not been deducted yet) for all options per the original run of the model and the updated runs) are shown below. Estimated Total Fair Value of Options/per option Options Fair Value on Grant Date of 1/1/2015 $35 Options Fair Value on 12/31/2015 $36 Options Fair Value on 12/31/2016 $38 Options Fair Value on 12/31/2017 $40 Option exercise date Fair Value on 2/1/2018 $44 A. What is the Total Compensation Expense (for all years) that the company will record that is related to these stock options? B. Make any necessary journal entries related to this stock option for 2015-2018. Page 2 of 3 657 words X English (United States) - + 135% Q Search in Document Acct Table Design Layout Home Insert Design Layout References Mailings Review View Tell me what you want to do + Share Arial 12 - A - A A A- == + T AaBbcende Aabende cDc cDd bt Paste B 1 v U - abcx X2 X A. 15. Normal No Spacing Heaving 1 Heading 2 Title Styles Panc 3. At January 1, 2017 the Leon White Company had 400,000 shares of common stock outstanding. The only 2017 common stock related transaction occurred on November 1, 2017 when White sold an additional 100,000 shares. Net income for 2017 was $2,565,000; the income tax rate was 40%. White had the following securities on its books for the year ended December 31, 2017: (a) 20,000 shares of $100 par 10% nonconvertible, cumulative preferred stock. Stock was sold at 102. (b) 30,000 shares of 8% convertible, cumulative preferred stock, par $100, sold at 110. Each share of preferred stock is convertible into two shares of common. (c) $2,000,000 face value of 8% nonconvertible bonds payable sold at par. (d) $3,000,000 face value of 6% convertible bonds payable sold at par. Each $1,000 bond is convertible into 20 shares of common. (e) Options to purchase 10,000 common stock shares were issued Jan. 1, 2017. Option price was $30 per share; market value at end of year, $40; average market value Jan. 1 to December 31, 2017, $35. Compute the required EPS figure(s) for 2017. Page 3 of 3 657 words X English (United States) = - + 135%