On January 1, 2018, Marguerite DeVille Co. granted restricted stock units (RSUs)
ID: 2599653 • Letter: O
Question
On January 1, 2018, Marguerite DeVille Co. granted restricted stock units (RSUs) representing 300,000 of its $1 par common shares to executives, subject to forfeiture if employment is terminated within three years. After the recipients of the RSUs satisfy the vesting requirement, the company will distribute the shares. The common shares had a market price of $12 per share on the grant date. At the date of grant, DeVille anticipated that 6% of the recipients would leave the firm prior to vesting. In 2019, 2% of the options are forfeited due to executive turnover. DeVille chooses the option not to estimate forfeitures. What amount should DeVille record as compensation expense for the year ended December 31, 2019, assuming DeVille chooses the option not to estimate forfeitures? Multiple Choice $72,000. $94,000. $1,128,000.
Explanation / Answer
$128000 is the correct answer
because Marguerite DeVille Co share is 300,000 of $1
employee terminated of forfetiture within 3 years =300,000/3=100,000
company market price is $12=1200,000
DeVelle anticapted 6%of recipent =1200,000*6%=11,28,000
DeVille compensate expenses for dec 31,2019 is 11,28,000