On January 1, 2021, California Safari granted 2 million restricted shares of its $1 par common stock to executives, subject to forfeiture if employment is terminated within four years. The shares have a market price of $6 per share on January 1, 2021.Ignoring taxes, what is the compensation expense for 2021 related to this restricted stock award?**Multiple Choice**- $3,000,000- $0- $4,000,000- $12,000,000**Explanation:**The compensation expense for 2021 is calculated based on the market price of the shares and the number of shares granted. The total value of the restricted shares is 2 million shares multiplied by $6 per share, which equals $12,000,000. Since the shares vest over four years, the annual compensation expense is $12,000,000 divided by 4, resulting in $3,000,000 per year. Thus, the correct answer is $3,000,000.

Restricted Stock: These stock form part of unregistered stock which is issued to corporate…

On January 1, 2021, California Safari granted 2 million restricted shares of its S1 par common stock to executives, subject to forfeiture if employment is terminated within four years. The shares have a market price of $6 per share on January 1, 2021. Ignoring taxes, what is the compensation expense for 2021 related to this restricted stock award? Multiple Choice $3,000,000 $O $4,000,000 $12,000,000

On January 1, 2021, California Safari granted 2 million restricted shares of its S1 par common stock to executives, subject to forfeiture if employment is terminated within four years. The shares have a market price of $6 per share on January 1, 2021. Ignoring taxes, what is the compensation expense for 2021 related to this restricted stock award? Multiple Choice $3,000,000 $O $4,000,000 $12,000,000

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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