ACCT 302 Connect Homework 19 Share Based Compensation Earnings Per Share Assignment solution answers

ACCT 302 Connect Homework 19 Share Based Compensation & Earnings Per Share Assignment solutions complete answers 

 

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First Link Services granted 4.4 million of its $1 par common shares to executives, subject to forfeiture if employment is terminated within four years. The common shares have a market price of $5 per share on the grant date of the restricted stock award.
 
1. Ignoring taxes, what is the total compensation cost pertaining to the restricted shares?
2. Ignoring taxes, what is the effect on earnings in the year after the shares are granted to executives?
 
(For all requirements, enter your answer in millions rounded to 2 decimal places (i.e., 5,500,000 should be entered as 5.50).)

 

McDonnell-Myer Corporation reported net income of $3,180 million. The company had 584 million common shares outstanding at January 1 and sold 24 million shares on February 28. As part of an annual share repurchase plan, 6 million shares were retired on April 30 for $43 per share.
 
Calculate McDonnell-Myer's earnings per share for the year. (Do not round intermediate calculations. Round your final answer to 2 decimal places.)

 

At December 31, 2020 and 2021, Funk & Noble Corporation had outstanding 920 million shares of common stock and 11 million shares of 8%, $100 par value cumulative preferred stock. No dividends were declared on either the preferred or common stock in 2020 or 2021. Net income for 2021 was $1,376 million. The income tax rate is 25%.
 
Calculate earnings per share for the year ended December 31, 2021. (Round your answer to 2 decimal places.)

 

Ahnberg Corporation had 520,000 shares of common stock issued and outstanding at January 1. No common shares were issued during the year, but on January 1, Ahnberg issued 140,000 shares of convertible preferred stock. The preferred shares are convertible into 280,000 shares of common stock. During the year Ahnberg paid $84,000 cash dividends on the preferred stock. Net income was $760,000.
 
What were Ahnberg's basic and diluted earnings per share for the year? (Round your answers to 2 decimal places.)

 

BigTech, Inc. included the following disclosure note in an annual report:
 
Share-Based Compensation (in part)
 
. . . compensation expense related to these grants is based on the grant date fair value of the RSUs and is recognized on a straight-line basis over the applicable service period.
 
The following table summarizes the activities for our unvested RSUs for the year ended December 31, 2017:

 

 
 
 
Number of Shares
(in thousands)
 
Weighted Average
Grant Date Fair Value
Unvested at December 31, 2016
 
 
114,644
 
 
 
 
$
21.54
 
 
Granted
 
 
54,152
 
 
 
 
 
31.91
 
 
Vested
 
 
(48,350
)
 
 
 
 
17.12
 
 
Forfeited
 
 
(15,667
)
 
 
 
 
25.47
 
 
Unvested at December 31, 2017
 
 
104,779
 
 
 
 
$
28.10
 
 
 
 
Required:

1. Assuming a four-year vesting period, how much compensation expense did BigTech report in the year ended December 31, 2018, for the restricted stock units granted during the year ended December 31, 2017?
2. Based on the information provided in the disclosure note, prepare the journal entry that summarizes the vesting of RSUs during the year ended December 31, 2017. (BigTech’s common shares have a par amount per share of $0.000006.)

 

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, 2021, that permit executives to acquire 15 million of the company’s $1 par common shares within the next five years, but not before December 31, 2022 (the vesting date). The exercise price is the market price of the shares on the date of grant, $41.50 per share. The fair value of the 15 million options, estimated by an appropriate option pricing model, is $10 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, 2021.
3. Prepare the appropriate journal entry to record compensation expense on December 31, 2021.
4. Prepare the appropriate journal entry to record compensation expense on December 31, 2022.

 

SSG Cycles manufactures and distributes motorcycle parts and supplies. Employees are offered a variety of share-based compensation plans. Under its nonqualified stock option plan, SSG granted options to key officers on January 1, 2021. The options permit holders to acquire 13 million of the company’s $1 par common shares for $22 within the next six years, but not before January 1, 2024 (the vesting date). The market price of the shares on the date of grant is $24 per share. The fair value of the 13 million options, estimated by an appropriate option pricing model, is $6.30 per option.
 
Required:

1. Determine the total compensation cost pertaining to the incentive stock option plan.
2. & 3. Prepare the appropriate journal entries to record compensation expense on December 31, 2021, 2022, and 2023. Record the exercise of the options if all of the options are exercised on May 11, 2025, when the market price is $25 per share.

 

On December 31, 2020, Ainsworth, Inc., had 660 million shares of common stock outstanding. Twenty one million shares of 9%, $100 par value cumulative, nonconvertible preferred stock were sold on January 2, 2021. On April 30, 2021, Ainsworth purchased 30 million shares of its common stock as treasury stock. Twelve million treasury shares were sold on August 31. Ainsworth issued a 5% common stock dividend on June 12, 2021. No cash dividends were declared in 2021. For the year ended December 31, 2021, Ainsworth reported a net loss of $145 million, including an after-tax loss from discontinued operations of $410 million.
 
Required:
1. Compute Ainsworth's net loss per share for the year ended December 31, 2021.
2. Compute the per share amount of income or loss from continuing operations for the year ended December 31, 2021.
3. Prepare an EPS presentation that would be appropriate to appear on Ainsworth's 2021 and 2020 comparative income statements. Assume EPS was reported in 2020 as $0.70, based on net income (no discontinued operations) of $462 million and a weighted-average number of common shares of 660 million.