On January 1, 20x1, SUMMER HEAT Co. grants 1,000 share options to each of its 100 key employees conditional upon each employee remaining in SUMMER’s employ over the next three years. SUMMER estimates that the fair value of each share option is ₱60. On the basis of a weighted average probability, THRIVE Co. estimates on December 31, 20x1 and December 31, 20x2 that 20 per cent of the employees will leave during the three-year period and therefore forfeit their rights to the share options. Twenty (20) employees actually left the company during the three-year period. Fifteen (15) employees left in 20x1 and the other five (5) left in 20x3. How much is the salaries expense in 20x3? *

On January 1, 20x1, SUMMER HEAT Co. grants 1,000 share options to each of its 100 key employees conditional upon each employee remaining in SUMMER’s employ over the next three years. SUMMER estimates that the fair value of each share option is ₱60. On the basis of a weighted average probability, THRIVE Co. estimates on December 31, 20x1 and December 31, 20x2 that 20 per cent of the employees will leave during the three-year period and therefore forfeit their rights to the share options. Twenty (20) employees actually left the company during the three-year period. Fifteen (15) employees left in 20x1 and the other five (5) left in 20x3. How much is the salaries expense in 20x3? *

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter15: Contributed Capital

Section: Chapter Questions

Problem 7RE: On January 1, 2019, Phoenix Corporation adopts a performance-based share option plan for 25...

See similar textbooks

Similar questions

On January 1, 20x1, HALOHALO COMPANY granted 1,000 share options to each of its 100 key employees conditional upon each employee remaining in HALOHALO’s employ over the next three years. HALOHALO estimated that the fair value of each share option is ₱60. On the basis of a weighted average probability, HALOHALO estimated on January 1, 20x1 that 20 per cent of employees will leave during the three-year period and therefore forfeit their rights to the share options. During 20x1, 2 employees left. HALOHALO revised its estimate of total employee departures over the three-year period from 20 per cent to 15 per cent. During 20x2, additional 3 employees left. HALOHALO again revised its estimate of total employee departures over the three-year period from 15 per cent to 12 per cent. During 20x3, additional 5 employees left. How much is the salaries expense in 20x3? *
On January 1, 20x1, HALOHALO Company granted 1,000 share options to each of its 100 key employees conditional upon each employee remaining in HALOHALO’s employ over the next three years. HALOHALO estimated that the fair value of each share option is ₱60. On the basis of a weighted average probability, HALOHALO estimated on January 1, 20x1 that 20 per cent of employees will leave during the three-year period and therefore forfeit their rights to the share options. During 20x1, 2 employees left. HALOHALO revised its estimate of total employee departures over the three-year period from 20 per cent to 15 per cent. During 20x2, additional 3 employees left. HALOHALO again revised its estimate of total employee departures over the three-year period from 15 per cent to 12 per cent. During 20x3, additional 5 employees left. How much is the accumulated share premium from share options outstanding as of December 31, 20x2? *
At the beginning of year 1, James Ltd grants 100 share options to each of its 120 employees, conditional on the employee remaining in the employ of James Ltd over the next 2 years. The company estimates that the fair value of the options on grant date is $12. On the basis of a weighted average probability, James Ltd estimates that 15% of its employees will leave during the vesting period. At the end of year 1, ten employees have left, and James Ltd estimates that a further five will leave during year 2. By the end of year 1, the company's share price has dropped, and it decides to reprice the share options. It estimates that the fair value of the original share options is $7 and the fair value of the repriced share options is $10. Five employees leave during year 2. Required Prepare a schedule setting out the remuneration expense to be recognised at the end of years 1 and 2.
On January 1, 2022, Jade Corporation granted share options to each of the 300 employees working in the sales department. The share options vest at the end of a three-year period provided that the employees remain in the entity’s employ and provided the volume of sales will increase by more than 10% per year. The fair value of each share option on grant date is P20. If the sales increase by more than 10%, each employee will receive 200 share options. If the sales increase by more than 15%, each employee will receive 300 share options. On December 31, 2022, the sales increased by more than 10%, and no employees have left the entity. On December 31, 2023, the sales increased by more than 15% and 20 employees left the entity. What amount of compensation expense should be recognized for 2023? 400,000 720,000 560,000 800,000
At the beginning of year 1, Bad Blood Company grants share option to each of its 100 employees working in the sales department. The share option will vest at the end of year 3, provided that the employees remain in the entity’s employ, and provide that the volume of sales of the product increases by an average of between 5 percent per year. If the volume of sales of the product increases by an average of between 5 percent and 10 percent per year, each employee will receive 100 share options. If the volume of sales increases by an average of between 11 and 15 percent each year, each employee will receive 200 share options. If the volume of sales increases by an average of 16% or more, each employee will receive 300 share options. On grant date, Bad Blood Company estimates that the share options have a fair value of 20 per option. Bad Blood Company also estimates that the volume of sales of the product will increase by an average of between 11 percent and 15 percent per year, and…
At the beginning of year 1, Bad Blood Company grants share option to each of its 100 employees working in the sales department. The share option will vest at the end of year 3, provided that the employees remain in the entity’s employ, and provide that the volume of sales of the product increases by an average of between 5 percent per year. If the volume of sales of the product increases by an average of between 5 percent and 10 percent per year, each employee will receive 100 share options. If the volume of sales increases by an average of between 11 and 15 percent each year, each employee will receive 200 share options. If the volume of sales increases by an average of 16% or more, each employee will receive 300 share options. On grant date, Bad Blood Company estimates that the share options have a fair value of 20 per option. Bad Blood Company also estimates that the volume of sales of the product will increase by an average of between 11 percent and 15 percent per year, and…
On January 1, 2019, Nevada Company granted share options to each of the 300 employees working in the sales department. The share options vest at the end of a 3-year period provided that the employees remain the entity’s employ and provided the volume of sales will increase by more than 10% per year. The fair value of each share option on grant date is P30. The par value per share is P50 and the option price is P60.If the sales increase by more than 10%, each employee will receive 200 share options. If the sales increase by more than 15%, each employee will receive 300 share options. On December 31, 2019, the sales increased by more than 10% but not more than 15% and no employees have left the entity. On December 31, 2020, sales increased by more than 15% and no employees have left. On December 31, 2021, the sales increased by more than 15% and 50 employees left the entity. All of the share options were exercised on December 31, 2021. What amount should be recognized as compensation…
Sunshine granted share options to its 600 employees on 1 October 2015. Eachemployee will receive 550 share options provided they continue to work for Sunshine for four years from the grant date. The fair value of each option at the grant date was K1.56.The actual and expected staff movement over the 4 years to 30 September 2019 is given below:2016 :22 employees left and another 50 were expected to leave over the next three years.2017 :A further 28 employees left and another 40 were expected to leave over the next 2 years.2018: A further 19 employees left and another 20 were expected to leave the followingyear. 2019: No actual figures are available to date.The sales director of Sunshine has stated in the board minutes that he disagrees with the treatment of the share options. No cash has been paid out to employees, therefore he failsto understand why an expense is being charged against profits.Requireda. Explain why share-based payments should be recognized in financial statementsb.…
IT Solutions Ltd. has a cash - settled SARS program for employees. These employees will receive a cash payment after five years of service, calculated as the excess of share price over $8.75. In early 20X1, employees in total are granted 180,000 units in the program. The fair value of one SARS unit is estimated at $1 at the end of 20X1, $3 at the end of 20X2, and $2 at the end of 20X3. Estimated retention is 90% at the end of 20X1, 88% at the end of 20X2, and 75% at the end of 20X3. The payment is made at the end of 20X 5. Required: Provide the journal entry to be recorded with respect to the SARS program at the end of 20X 1, 20X2, and 20X3. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Do not round intermediate calculations.)
On 1 January 2017, SURDIN granted 100 share options to each of its 80 employees, on condition that the employees would stay in employment for three years. SURDIN estimated that 10% of these employees would leave the employment. The fair value of the options was as follows:RM1 January 2017 = RM 5.0031 December 2017 = RM 5.5031 December 2018 = RM 5.9031 December 2019 = RM 5.70Required:Calculate the amount recognized as expenses in the statement of profit or loss and the amount disclosed as equity in the statement of financial position
On January 1, 2020, ABC Company granted share options to each of the 300 employees working in the Accounting department. The options price is P90 and the par value is P70 per share.The share options vest at the end of a three-year period provided that the employees remain in the entity’s employ and provided the volume of sales will increase by 10% per year.The fair value of each share option on grant date is P35.The share will vest as follows: If the sales increase by 10%, each employee will receive 200 share options; If the sales increase by 15%, each employee will receive 300 share options.· On December 31, 2020, the sales increased by 10%, and no employees have left the entity· On December 31, 2021, sales increased by 15% and no employees have left.On December 31, 2022, the sales increased by 15% and 50 employees left the entityWhat is the share premium upon exercise of the share options on December 31, 2022?
On January 1, 2020, ABC Company granted share options to each of the 300 employees working in the Accounting department. The options price is P90 and the par value is P70 per share.The share options vest at the end of a three-year period provided that the employees remain in the entity’s employ and provided the volume of sales will increase by 10% per year. The fair value of each share option on grant date is P35. The share will vest as follows: If the sales increase by 10%, each employee will receive 200 share options; If the sales increase by 15%, each employee will receive 300 share options. · On December 31, 2020, the sales increased by 10%, and no employees have left the entity· On December 31, 2021, sales increased by 15% and no employees have left.On December 31, 2022, the sales increased by 15% and 50 employees left the entityWhat is the compensation expense for 2022?