Block Corporation permits key employees to buy shares directly from the company through payroll deduction. There are no brokerage fees and shares can be purchased at a 10% discount. During July, employees purchased 36,000 shares at a time when the established market price was $31 per share. Block will record salary expense associated with July purchases of ________.

Question

Quizplus · Accepted Answer

The salary expense is the discount given to employees. The discount is 10% of the market price, so $31 * 10% = $3.10 per share. For 36,000 shares, the expense is 36,000 * $3.10 = $111,600.

Block Corporation Permits Key Employees to Buy Shares Directly from the Company