Exhibit 15-5 on January 1, 2013, Roberts Company Adopts a Compensatory

question 126

Multiple Choice

Exhibit 15-5 On January 1, 2013, Roberts Company adopts a compensatory share option plan and grants 40 executives 1,000 shares each at $30 a share. The fair value per option is $7 on the grant date. The company estimates that its annual employee turnover rate during the service period of three years will be 4%.
-Refer to Exhibit 15-5. The journal entry to record compensation expense for 2013 will be (Round off any turnover calculations to three decimal places.)

• A) Compensation Expense \(\quad \)\(\quad \)247,726
• Paid-in Capital Share Options \(\quad \)\(\quad \)247,726
• B) Compensation Expense \(\quad \)\(\quad \)82,575
• Paid-in Capital Share Options\(\quad \)\(\quad \) 82,575
• C) Compensation Expense \(\quad \)\(\quad \)91,467
• Paid-in Capital Share Options \(\quad \)\(\quad \)91,467
• D) Compensation Expense\(\quad \)\(\quad \) 93,333
• Common Stock Option Plan \(\quad \)\(\quad \)93,333

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