Aon reports that unamortized deferred compensation

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Aon reports that "Unamortized deferred compensation expense, which includes both opti and awards, amounted to $254 million as of December 31,2010, with a remaining weight•..• - average amortization period of approximately 2.0 years." MID-MODULE REVIEW 1 Part 1 Assume that Accenture (ACN) reported the following transactions relating to its stock accounts in 2012. Jan 15 Issued 10,000 shares of $5 par value common stock at $17 cash per share Mar 31 Purchased 2,000 shares of its own common stock at $15 cash per share. June 25 Reissued 1,000 shares of its treasury stock at $20 cash per share. Use the financial statement effects template to identify the effects of these stock transactions. Part 2 Accenture reports the following table in its lO-K,which is related to its stock compen- sation plan. Number of Options Weighted Average Weighted Remaining Average Contractual Aggregate Exercise Term Intrinsic Price (In Years) Value Options outstanding as of August 31, 2009 . Granted . Exercised . Forfeited . Options outstanding as of August 31,2010 . Options exercisable as of August 31,2010 . Options exercisable as of August 31,2009 . Options exercisable as of August 31,2008 . $19.35 40.87 18.63 21.72 19.63 19.42 19.11 18.69 356,341 351,374 406,360 745,341 3.6 $412,098 29,040,084 16,539 (8,010,117) (126,444) 20,920,062 20,386,549 28,150,454 32,789,179 2.6 2.5 3.4 4.3 Required a. Explain theterms "Granted," "Exercised," and"Forfeited." Whatis themeaning of "Weighted Average Exercise Price"? /' b. Explain how the compensation cost related to the options above is recognized in financial statements. The solution is on page 8-48. ANALYZING EARNED CAPITAL We now turn to the earned capital portion of stockholders' equity. Earned capital represents cumulative profit that the company has retained. Recall that earned capital increases each by income earned and decreases by any losses incurred. Earned capital also decreases by dends paid to shareholders. Not all dividends are paid in the form of cash. Companies can
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Module 8 I Equity Recognition and Owner Financing 8-16 nds in many forms, including property (land, for example) or additional shares of stock. We both cash and stock dividends in this section. Earned capital also includes the positive or _ ive effects of accumulated other comprehensive income (AOCI). The earned capital of Aon '_ ighted in the following graphic. olders' Equity (In millions except per share amounts) December 31, December 31, 2010 2009 on stock-$1 par value Authorized: 750 shares ed: 2010-385.9; 2009-362.7) . -- ional paid-in capital . ry stock at cost (shares:2010-53.6; 2009-96.4) . . ed earnings . ulated other comprehensive loss . - - Aon stockholders' equity . ntrolling interest " . - - equity . $ 386 4,000 (2,079) 7,861 (1,917) 8,251 55 $8,306 $ 363 3,215 (3,859) 7,335 (1,675) 5,379 52 $5,431 contributed and earned capital accounts together for learning purposes; in the Aon balance sheet, these accounts are by positive and negative balances. h Dividends y companies, but not all, pay dividends. Their reasons for dividend payments are varied. dividends are paid in cash on a quarterly basis. Aon makes the following disclosure relating ividends in its 2010 lO-K: Dividend During 2010, 2009, and 2008, Aon paid dividends on its common stock of $175 million, .165 million and $171 million, respectively. Dividends paid per common share were $0.60 for each of the years ended December 31, 2010, 2009, and 2008.
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