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Category > Business & Finance Posted 08 May 2017 My Price 7.00

Determine the total compensation cost pertaining to the restricted shares.

Restricted stock award plan; forfeitures anticipated

Magnetic-Optical Corporation offers a variety of share-based compensation plans to employees. Under its restricted stock award plan, the company on January 1, 2016, granted 4 million of its $1 par common shares to various division managers. The shares are subject to forfeiture if employment is terminated within three years. The common shares have a market price of $22.50 per share on the grant date.

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, 2016.

3. Prepare the appropriate journal entry to record compensation expense on December 31, 2016.

4. Suppose Magnetic-Optical expected a 10% forfeiture rate on the restricted shares prior to vesting. Determine the total compensation cost.

 

Answers

Alpha Geek
(8)
Status NEW Posted 08 May 2017 05:05 PM My Price 7.00

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file 1494264642-1849582_1_636298041136867632_stock-option-forfeiture.xlsx preview (219 words )
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