CPA · Question 28 · Area 3: Technical Accounting and Reporting
On January 1, Year 1, Company X grants 10,000 stock options to executives. <br/>- Vesting Period: 3 years (cliff vesting)<br/>- Fair Value per option at grant date: $15<br/>- Estimated forfeiture rate: 5% per year<br/><br/>In Year 1, 4% of options are forfeited. The company adjusts its estimated forfeiture rate to 4% per year. What amount of compensation expense should be recognized in Year 1?
Answer options:
$50,000
$44,237
$42,869
$48,000
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