To encourage employee ownership of the company's common shares, KL Corp. permits any of its employees to buy shares directly from the company through payroll deduction. There are no brokerage fees and shares can be purchased at a 12% discount. During May, employees purchased 10,000 shares at a time when the market price of the shares on the New York Stock Exchange was $12 per share. KL will record compensation expense associated with the May purchases of:

Answers

Answer 1

Answer:

Dr Cash 105,600

Dr Compensation Expense 14,400

Cr Common Stock 10,000

Cr Paid-In Capital – Excess of Par 110,000

Explanation:

KL Corp Journal entry

Dr Cash 105,600

Dr Compensation Expense 14,400 (10,000*12*12%)

Cr Common Stock 10,000 (10,000*1)

Cr Paid-In Capital – Excess of Par 110,000

(10,000*(12-1))


Related Questions

Brownley Company has two service departments and two operating (production) departments. The Payroll Department services all three of the other departments in proportion to the number of employees in each. The Maintenance Department costs are allocated to the two operating departments in proportion to the floor space used by each. Listed below are the operating data for the current period: Service Depts. Production Depts. Payroll Maintenance Cutting Assembly Direct costs $ 20,400 $ 25,500 $ 76,500 $ 105,400 No. of personnel 15 15 45 Sq. ft. of space 10,000 15,000 The total cost of operating the Maintenance Department for the current period is:

Answers

Answer:

The total cost of operating the Maintenance Department for the current period is $29,580

Explanation:

In order to calculate The total cost of operating the Maintenance Department for the current period we would have to calculate first the Overhead allocated to Maintenance from Payroll department as follows:

Overhead allocated=Payroll overhead×(Maintenance payroll personnel/Total personnel)

Overhead allocated=$ 20,400×(15/15+15+45)

Overhead allocated=$4,080

Therefore, to calculate the The total cost of operating the Maintenance Department for the current period we would have to use the following formula:

Total cost of operating Maintenance Department=Overhead allocated+Direct overhead incurred

Total cost of operating Maintenance Department=$4,080+$25,500

Total cost of operating Maintenance Department=$29,580

The total cost of operating the Maintenance Department for the current period is $29,580

Which of the following statement(s) is(are) true regarding municipal bonds? I) A municipal bond is a debt obligation issued by state or local governments. II) A municipal bond is a debt obligation issued by the federal government. III) The interest income from a municipal bond is exempt from federal income taxation. IV) The interest income from a municipal bond is exempt from state and local taxation in the issuing state.

Answers

Answer:

I, III and IV Only.

Explanation:

A municipal bond is explained to be a debt obligation issued by a nonprofit organization, a private-sector corporation or another public entity using the loan for public projects such as constructing schools, hospitals and highways.

A municipal bond is categorized based on the source of its interest payments and principal repayments. A bond can be structured in different ways offering various benefits, risks and tax treatments. Income generated by a municipal bond may be taxable.

Answer: I) A municipal bond is a debt obligation issued by state or local governments.

III) The interest income from a municipal bond is exempt from federal income taxation.

IV) The interest income from a municipal bond is exempt from state and local taxation in the issuing state.

Explanation:

A municipal bond is usually a debt security issued by a state, or local government to finance its capital expenditures, which usually includes the construction of Roads, Bridges or Institutions( schools ). They can be considered as loans that an investor gives to local governments. This kind of bonds are exempted from federal taxes and most state and local taxes, Which makes them very attractive to interested individuals who are on high income tax brackets.

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