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enot [183]
3 years ago
11

Hammerstein Corporation offers a variety of share-based compensation plans to employees. Under its restricted stock award plan,

the company, on January 1, 2021, granted 2 million of its $1 par common shares to various division managers. The shares are subject to forfeiture if employment is terminated within four years. The common shares have a market price of $20 per share on the award date.
Required:

1. Determine the total compensation cost from these restricted shares. 2. & 3. Prepare the appropriate journal entries. 4. Suppose a 15% forfeiture rate was expected prior to vesting. Determine the total compensation cost, assuming the company follows the fair value approach and chooses to anticipate forfeitures at the grant date.
Business
1 answer:
olchik [2.2K]3 years ago
8 0

Answer:

A. $40,000,000

B.No entry

C.Dr Compensation Expense 10,000,000

Cr Paid-In-Capital- Restricted Stock 10,000,000

D. $34,000,000

Explanation:

A.$20 * 2M Shares

= $40,000,000

B. No Entry

C.

Dr Compensation Expense 10,000,000

($40,000,000/ 4yrs)

Cr Paid-In-Capital- Restricted Stock 10,000,000

D.$20 * 2M Shares * 85%

= $40,000,000*85%

= $34,000,000

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Rocky industries received its telephone bill in the amount of $300 and immediately paid it. rocky's journal entry to record this
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8 0
3 years ago
You want to buy your dream car which will cost you $5900. If you could invest your entire savings of $3500 at an annual interest
Liula [17]

Answer:

t = 4.607742347 years rounded off to 4.61 years

Explanation:

To calculate the number of years it will take an investment of $3500 to grow to $5900 at an annual interest rate of 12%, we will use the formula for the future value of cash flows. The formula can be written as follows,

Future value = Present value * (1+i)^t

Where,

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Taking log on both sides.

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3 years ago
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