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mrs_skeptik [129]
3 years ago
10

Indigo Company issues 11,300 shares of restricted stock to its CFO, Mary Tokar, on January 1, 2020. The stock has a fair value o

f $565,000 on this date. The service period related to this restricted stock is 5 years. Vesting occurs if Tokar stays with the company until December 31, 2024. The par value of the stock is $10. At December 31, 2020, the fair value of the stock is $396,000.
Required:
a. Prepare the journal entries to record the restricted stock on January 1, 2014 (the date of grant), and December 31, 2015
b. On July 25, 2018, Tokar leaves the company. Prepare the journal entry to account for this forfeiture.
Business
1 answer:
Fantom [35]3 years ago
4 0

Answer:

a. Prepare the journal entries to record the restricted stock on January 1, 2014 (the date of grant), and December 31, 2015

January 1, 2014, restricted shares are issued (market price $50 per stock)

Dr Unearned compensation 565,000

    Cr Common stock 113,000

    Cr Additional paid in capital (stock options) 452,000

December 31, 2015, two years of vesting period have passed

Dr Stock based compensation expense 113,000

    Cr Unearned compensation 113,000

b. On July 25, 2018, Tokar leaves the company. Prepare the journal entry to account for this forfeiture.

July 25, stock options are forfeited

Dr Unearned compensation 452,000

    Cr Stock based compensation expense 452,000

Explanation:

total stock compensation 11,300

vesting period 5 years = 11,300 / 5 = 2,260 stocks

stock based compensation is recorded using the market price on the date of the grant (January 1, 2014) which = $565,000 / 11,300 = $50 per stock

nothing really happens to the company when the stock options are granted, because unearned compensation is a contra equity account that reduces any increase in equity resulting from the stock options.

January 1, 2014, restricted shares are issued (market price $50 per stock)

Dr Unearned compensation 565,000

    Cr Common stock 113,000

    Cr Additional paid in capital (stock options) 452,000

The company starts recording expenses as the vesting period is accrued.

December 31, 2014, one year of vesting period has passed

Dr Stock based compensation expense 113,000

    Cr Unearned compensation 113,000

December 31, 2015, two years of vesting period have passed

Dr Stock based compensation expense 113,000

    Cr Unearned compensation 113,000

December 31, 2016, three years of vesting period have passed

Dr Stock based compensation expense 113,000

    Cr Unearned compensation 113,000

December 31, 2017, four years of vesting period have passed

Dr Stock based compensation expense 113,000

    Cr Unearned compensation 113,000

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Foster Manufacturing uses a job order cost accounting system. On April 1, the company has Work in Process Inventory of $7,600 an
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Answer:

<u>Foster Manufacturing </u>

<u>Journal Entries</u>

<u>Sr. No                       Particulars                       Debit           Credit</u>

1                    Work in Process Job No. 221        1200

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                   Work in Process Job No. 223       2400

                    Work in Process Job No. 224      2600

         Factory Overhead  Indirect Materials      600

                              Materials Inventory                                  8500

Materials Requisitioned to specific jobs work in process inventory.

2. Direct Labor    Work in Process Job No. 221        1600

     Direct Labor  Work in Process Job No. 222      2200

  Direct Labor    Work in Process Job No. 223       2900

    Direct Labor Work in Process Job No. 224      2800

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                                      Payroll                                               9500

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3.          Work in Process Job No. 221              1120

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                    Work in Process Job No. 224      1960  

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Manufacturing Overheads applied to specific jobs at the rate of 70%.

4.     Finished Goods Inventory          $ 7940

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         Work in Process Job No. 221 Materials                     1200

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3 years ago
Identify which of the following microeconomic topics can have an impact on macroeconomic topics?
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Explanation:

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The microeconomic topics can have an impact on macroeconomic topics is option B "How do people decide how much to save for the future, or whether they should borrow to spend beyond their current means".

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Answer:

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Total liabilities and equity = $65 million

Current liabilities = $10 million

Inventory = $15 million

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Total liabilities and equity = Total Assets

65 Million = Total Fixed Assets + Total Current Assets

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Total Fixed Assets = 65 million - 45 million

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3 years ago
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