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ch16AdditionalAnswers - CHAPTER 16 Dilutive Securities and...

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CHAPTER 16 Dilutive Securities and Earnings Per Share EXERCISE 16-10 1/2/10 No entry (total compensation cost is $600,000) 12/31/10 Compensation Expense. .............................. 300,000 Paid-in Capital—Stock Options. ................. 300,000 [To record compensation expense for 2010 (1/2 X $600,000)] 12/31/11 Compensation Expense. .............................. 300,000 Paid-in Capital—Stock Options. .................. 300,000 [To record compensation expense for 2011 (1/2 X $600,000)] 1/3/12 Cash (30,000 X $40). ..................................... 1,200,000 Paid-in Capital—Stock Options ($600,000 X 30,000/40,000). ....................... 450,000 Common Stock (30,000 X $10). ............ 300,000 Paid-in Capital in Excess of Par. ......... 1,350,000 (To record issuance of 30,000 shares of $10 par value stock upon exercise of options at option price of $40) EXERCISE 16-10 (Continued) (Note : The market price of the stock has no relevance in the prior entry and the following one.) 5/1/12 Cash (10,000 X $40). ............................................ 400,000 Paid-in Capital—Stock Options ($600,000 X 10,000/40,000). ............................ 150,000 Common Stock. ........................................... 100,000 Paid-in Capital in Excess of Par. ................ 450,000 (To record issuance of 10,000 shares of $10 par value stock upon exercise of options at option price of $40)
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EXERCISE 16-16 (a) Event Dates Outstanding Shares Outstanding Restatement Fraction of Year Weighted Shares Beginning balance Jan. 1–Feb. 1 480,000 1.2 X 3.0 1/12 144,000 Issued shares Feb. 1–Mar. 1 600,000 1.2 X 3.0 1/12 180,000 Stock dividend Mar. 1–May 1 720,000 3.0 2/12 360,000 Reacquired shares May 1–June 1 620,000 3.0 1/12 155,000 Stock split June 1–Oct. 1 1,860,000 4/12 620,000 Reissued shares Oct. 1–Dec. 31 1,920,000 3/12 480,000
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ch16AdditionalAnswers - CHAPTER 16 Dilutive Securities and...

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