On January 1, 2017, Smart Corporation Issues 12,500 Shares of $2

question 118

Multiple Choice

On January 1, 2017, Smart Corporation issues 12,500 shares of $2 par restricted stock to a key executive. The market value of unrestricted shares of the same stock on the date of issue is $18 and there is a four-year vesting period. On January 1, 2018, the executive leaves and forfeits the restricted stock award. The journal entry to record the forfeiture includes which of the following?

• A) credit Deferred Compensation $56,250
• B) credit Common Stock $25,000
• C) debit Deferred Compensation for $25,000
• D) credit Compensation Expense for $56,250

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Definitions:

Flat Fee

A fixed charge for a service, regardless of usage or time consumed.

Laspeyres Price Index

A price index calculated by taking the ratio of the total cost of purchasing a set of goods at current prices to the cost of purchasing the same set of goods at base period prices.

Consumptions

The act of using goods and services to satisfy wants and needs, including everything from essentials like food and clothing to luxury items.

Base Year

A reference year used in economic indices and statistical analyses to facilitate the comparison of data over time.