devry acct312 week 4 homework assignment

Week Four – Homework Exercises E19-2, E19-5, E19-10, and
E19-17

E19-2 On January 1,
2013, VKI Corporation awarded 12 million of its $1 par common shares to key
personnel, subject to forfeiture if employment is terminated within three
years. On the grant date, the shares have a market price of $2.50 per share.

Required: 1.
Determine the total compensation cost pertaining to the restricted shares.
2.
Prepare the appropriate journal entry to record the award of restricted shares
on January 1, 2013.
3.
Prepare the appropriate journal entry to record compensation expense on
December 31, 2013.
4.
Prepare the appropriate journal entry to record compensation expense on
December 31, 2014.
5.
Prepare the appropriate journal entry to record compensation expense on
December 31, 2015.
6.
Prepare the appropriate journal entry to record the lifting of restrictions on
the shares at December 31, 2015.

E19-5 American Optical
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, 2013, that permit executives to acquire 4 million of the
company’s $1 par common shares within the next five years, but not before
December 31, 2014 (the vesting date). The exercise price is the market price of
the shares on the date of grant, $14 per share. The fair value of the 4 million
options, estimated by an appropriate option pricing model, is $3 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, 2013.
3.
Prepare the appropriate journal entry to record compensation expense on
December 31, 2013.
4.
Prepare the appropriate journal entry to record compensation expense on
December 31, 2014.

E19-10 For the year
ended December 31, 2013, Norstar Industries reported net income of $655,000. At
January 1, 2013, the company had 900,000 common shares outstanding. The
following changes in the number of shares occurred during 2013:

30-Apr Sold 60,000
shares in a public offering.
24-May Declared and
distributed a 5% stock dividend.
1-Jun Issued 72,000
shares as part of the consideration for the purchase of assets from a subsidiary

Required: Compute
Norstar’s earnings per share for the year ended December 31, 2013.

E19-17 “(Note:
This is a variation of E 19–15 modified to include convertible bonds).

On December 31, 2012, Berclair Inc. had 200 million shares
of common stock and 3 million shares of 9%, $100 par value cumulative preferred
stock issued and outstanding. On March 1, 2013, Berclair purchased 24 million
shares of its common stock as treasury stock. Berclair issued a 5% common stock
dividend on July 1, 2013. Four million treasury shares were sold on October 1.
Net income for the year ended December 31, 2013, was $150 million. The income
tax rate is 40%.

Also outstanding at December 31 were incentive stock options
granted to key executives on September 13, 2008. The options are exercisable as
of September 13, 2012, for 30 million common shares at an exercise price of $56
per share. During 2013, the market price of the common shares averaged $70 per
share.

$62.5 million of 8% bonds, convertible into 6 million common
shares, were issued at face value in 2009.”

Required: Compute
Berclair’s basic and diluted earnings per share for the year ended December 31,
2013.