Question: question 3 Question 3 (12 marks) Part A. On 1 January 2020, Company ARO issued 500 restricted shares to its CEO. ARO's share price was

question 3

Question 3 (12 marks) Part A. On 1 January 2020, Company ARO issued 500 restricted shares to its CEO. ARO's share price was $19 on that day. Vesting occurs if the CEO remains in employment with ARO for five years. Required: Prepare the journal entries for ARO for the year ended 31 December 2020. (4 marks) Part B. In its first three years of operations, Company COR reported profit before tax of $70,000 in 2018, $100,000 in 2019 and $40,000 in 2020. However, for tax purposes, COR has taxable income of $30,000 in 2018, $80,000 in 2019 and $100,000 in 2020. Assume a tax rate of 16% applies. Required: Prepare the journal entries for COR in 2018, 2019 and 2020. (8 marks) [Total for Question 3: 12 marks]

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