Use the following information for question 14 and 15
Swing High Inc. offers its 100 employees to participate in an employee share-purchase plan. Under the terms of plan, employees are entitled to purchase 10 shares at 10% discount. The par values of shares were $10. Overall, 60 employees accepted the offer and each employee purchased six shares. The market price on purchase date was $100.
-What is the compensation expense recorded by Swing High Inc.?

Question

Quizplus · Accepted Answer

The compensation expense is calculated as the discount given to employees. The market price is $100, and the discount is 10%, so the discount per share is $10. Each of the 60 employees purchased 6 shares, so the total number of shares purchased is 360. Therefore, the compensation expense is 360 shares * $10 discount = $3,600.

Use the Following Information for Question 14 and 15