Question
Q3. Use the following information to answer Q3 a, b, c & d. (One mark for each wholly correct answer.) UCL Corp. issued 100,000 ($2
Q3. Use the following information to answer Q3 a, b, c & d. (One mark for each wholly correct answer.)
UCL Corp. issued 100,000 ($2 par) restricted shares to its CFO Jeremy Lord on Jan 1, 2015. On that day, the fair market value of each share was $4.50. Vesting occurred on Jan 1, 2018, providing Jeremy stayed with UCL for 3 years. However, Jeremy resigned Jan 3, 2017.
Provide the appropriate journal entries for the following dates and occurrences.
3a | Jan 1, 2015 | Issue | Dr. | Cr. |
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3b. | Jan 3 2017 | Resignation | Dr. | Cr. |
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Clearly EXPLAIN the effect of the journal entries on the financial statements of UCL.
3c. | The effect of journal entry 3a (the issue) on the financial statements of UCL is as follows |
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3d. | The effect of journal entry 3b (resignation) on the financial statements of UCL is as follows |
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Q4. Refer to the information given in Q3 above. (One mark for a wholly correct answer.)
Assume that Jeremy did not resign on Jan 6, 2017 but that he stayed with UCL throughout 2018. The 100,000 shares thus vested and belonged to him.
As is the case with restricted shares Jeremy did not have to pay for the shares. The shares were given to him by the company. Now in fact someone had to pay for them. Explain who this was and how they paid.
Who this was |
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How they paid |
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