Acct 304

1. On 1/1/09 Dunkin Donuts awarded 30,000 shares of common stock with a par value of $1 to it's top management. In order to receive the shares management must not leave within the next 3 years. On the date of the award, the FMV of the shares was $15.

Record the entries for 2009, 2010, 2011 and to lift the restrictions at the end of the 3 years.

JE for 2009:

DR COMPENSATION EXPENSE 150,000

CR PAID IN CAPITAL R/S 150,000

JE FOR 2010

DR COMPENSATION EXPENSE 150,000

CR PAID IN CAPITAL R/S 150,000

JE FOR 2011

DR COMPENSATION EXPENSE 150,000

CR PAID IN CAPITAL R/S 150,000

J/E the end of the 3 years to lift the restrictions:

DR PAID IN CAPITAL 450,000

CR COMMON STOCK 30,000

CR APIC-COMMON STOCK 420,000

2. Pizzeria Uno allows it's employees to purchase it's $1 par value common shares at 10% discount. During the month of November employees purchased 2,500 shares. The market price was $25 per share. Prepare the journal entry to record the November purchases under the employee share purchase plan. (Points: 25)

Price of share = 25 x 10% discount = 2.50

= 25-2.50

= 22.50

Cash Collected

2,500 shares sold x 22.50 = 56,250

Compensation Expense

2,500 shares sold x 2.5 = 6,250

JE

DR CASH 56,250

DR COMPENSATION EXPENSE 6,250

CR COMMON STOCK 2,500

CR APICS - C/S 60,000

3. Based on the following information calculate the weighted average number of common shares outstanding. (SHOW ALL YOUR WORK!)

1/1/10 - 1,000,000 shares outstanding

3/1/10 - Issued 200,000 shares

4/1/10 - Declared a 20% stock dividend...