Exam 15: Contributed Capital

In accounting for a stock split, a company usually

Exhibit 15-8 On January 1, 2013, Margarita Company granted share appreciation rights (SARs) to the president, which permitted her to receive cash or stock for the difference between the quoted market price and $50 for 2,000 shares of the company's stock on the exercise date. The service period ends on December 31, 2015, and the rights must be exercised by December 31, 2018. Assume that on December 31, 2016, the president exercises all of her rights and receives cash. Using an options pricing model, the estimated fair values of the SARs were as follows: -Refer to Exhibit 15-8. What is the compensation expense related to the SARs for the year ending December 31, 2015?

FASB requires companies to provide disclosure regarding the preferred stock characteristics.

For a compensatory share option plan, any compensation cost related to the plan must be recognized over the service period. The underlying financial accounting concept that supports this approach is

A company is exchanging its common stock for land in a nonmonetary exchange. This transaction should be valued based upon the

Contributed capital does not include subscribed stock because it has not been issued yet.

Exhibit 15-1 Hanson Co. issued 10,000 shares of its $5 par common stock for $15 a share. In addition, it incurred legal and accounting fees, stock certificate costs, and other related expenses totaling $18,500. -Refer to Exhibit 15-1. Assume the sale was the initial issuance of stock at incorporation for Hanson Co. The entry to record the sale would include a

The authorized shares of capital stock is the number of shares

Which of the following is not a characteristic of the corporate form of business entity?

A corporation whose stock is traded on a stock exchange is called a(n)

Under the fair value method, the grant date is the date

Exhibit 15-5 On January 1, 2013, Roberts Company adopts a compensatory share option plan and grants 40 executives 1,000 shares each at $30 a share. The fair value per option is $7 on the grant date. The company estimates that its annual employee turnover rate during the service period of three years will be 4%. -Refer to Exhibit 15-5. At the end of 2014, the company estimates that the employee turnover will be 5% a year for the entire service period. At the end of 2015, only 30,000 options vest as only 30 of the 40 executives actually remain. The compensation expense for 2015 will be (Round off turnover calculations to three decimal places and answer to the nearest dollar.)

Which of the following share option plans would involve the creation of a liability account over the life of the plan?

In the United States, corporations provide more than