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kobasew19 · 03-06-2008, 12:29 PM

I’m doing a case for class and just wanted the opinions of some accountants on this board. Here are the scenarios:

Player A has been traded to another team because the coach doesn’t like how passive his play has been. His one way contract stipulates that he couldn’t be released and he’d continue to receive his full salary if he was unable to play due to injury. The deal specified that Team A (the team that traded Player A) must continue to pay part of Player A’s salary of 125,000 in year one and 100,000 in year two. These payments are contingent on Player A on not retiring in the next two years. (This is unlikely as he is only 25, and he would still get paid out if he was injured) Also, 1.1 million of his original signing bonus was unamortized at the time of the trade.

Player B has been traded to another team for future considerations. Player B has had one injury after another throughout his career. Team A has agreed to pay part of Player B’s salary in each of the four years remaining on his contract. The amount of payment depends on the number of games that Frankie plays each season. If Player B plays less than 31 games, the team would have to pay 80,000 of his salary. If Player B plays 31-49 games, Team A must pay 55,000 and if he plays more than 49 games, then no payment is required. At the time of the trade, the unamortized value of Player B’s original signing bonus was 1,330,000.

Player C was a free agent signing by Team A. The five-year contract, reportedly worth as much as 25,000,000 included a 3,000,000 signing bonus. Player C’s contract is loaded with bonus clauses tied to his on-ice performance. If he appears in the annual all star game held in February, he will receive a 1,000,000 bonus. If by the all star game, he has scored at least 30 regular season goals, Player C would receive an additional 500,000. At the end of the regular season, another 500,000 bonus goes to Player C if he has a total of 60 goals. One the team reps have confirmed that Player C has been added to the all star roster and has 37 goals and 83 assists a month prior to the event.

So as Team A’s accountant, make the correct entries and remember to base everything in accordance with GAAP.

Thank you guys in advance for your help with this.

03-06-2008, 12:29 PM	#1
kobasew19 First Line Centre Join Date: Oct 2002 Exp:	Attention Accountants: Hockey players’ salaries I’m doing a case for class and just wanted the opinions of some accountants on this board. Here are the scenarios: Player A has been traded to another team because the coach doesn’t like how passive his play has been. His one way contract stipulates that he couldn’t be released and he’d continue to receive his full salary if he was unable to play due to injury. The deal specified that Team A (the team that traded Player A) must continue to pay part of Player A’s salary of 125,000 in year one and 100,000 in year two. These payments are contingent on Player A on not retiring in the next two years. (This is unlikely as he is only 25, and he would still get paid out if he was injured) Also, 1.1 million of his original signing bonus was unamortized at the time of the trade. Player B has been traded to another team for future considerations. Player B has had one injury after another throughout his career. Team A has agreed to pay part of Player B’s salary in each of the four years remaining on his contract. The amount of payment depends on the number of games that Frankie plays each season. If Player B plays less than 31 games, the team would have to pay 80,000 of his salary. If Player B plays 31-49 games, Team A must pay 55,000 and if he plays more than 49 games, then no payment is required. At the time of the trade, the unamortized value of Player B’s original signing bonus was 1,330,000. Player C was a free agent signing by Team A. The five-year contract, reportedly worth as much as 25,000,000 included a 3,000,000 signing bonus. Player C’s contract is loaded with bonus clauses tied to his on-ice performance. If he appears in the annual all star game held in February, he will receive a 1,000,000 bonus. If by the all star game, he has scored at least 30 regular season goals, Player C would receive an additional 500,000. At the end of the regular season, another 500,000 bonus goes to Player C if he has a total of 60 goals. One the team reps have confirmed that Player C has been added to the all star roster and has 37 goals and 83 assists a month prior to the event. So as Team A’s accountant, make the correct entries and remember to base everything in accordance with GAAP. Thank you guys in advance for your help with this.