Corinthians granted 5,000 share options to employees at an exercise price of P5 per share. The grant date is January 1, 2021 and the options are subject to a two –year vesting period. The grant date fair value of each option was P40. At December 31, 2021, Corinthians Company modified the grant by extending the vesting period to June 30, 2023. Management expects that the number of options outstanding as of December 31, 2022, the original vesting date, would be 4,500. The actual number of options outstanding at December 31, 2022 was 4,200 of which only 4,000 vested on June 30, 2023. Compensation expense for 2021 – 2023

Corinthians granted 5,000 share options to employees at an exercise price of P5 per share. The grant date is January 1, 2021 and the options are subject to a two –year vesting period. The grant date fair value of each option was P40. At December 31, 2021, Corinthians Company modified the grant by extending the vesting period to June 30, 2023. Management expects that the number of options outstanding as of December 31, 2022, the original vesting date, would be 4,500. The actual number of options outstanding at December 31, 2022 was 4,200 of which only 4,000 vested on June 30, 2023. Compensation expense for 2021 – 2023

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 7E

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On January 1, 2019, Phoenix Corporation adopts a performance-based share option plan for 25 executives, with the number of shares based on the yearly increase in sales. At the end of 2019, based on a 10% increase in sales, it expects that each executive will be granted 150 options and that the fair value of an option expected to vest is 15.75. Phoenix expects a turnover rate of 15% over the 3-year service period. Determine the compensation expense for 2019 for this plan.
On April 1, 2020, an entity subject to IFRS grants 60,000 share options to its employees. Each option has an exercise price of $18, and the fair value of the share options are estimated at $340,000. The vesting period ends on December 31, 2022, and the exercise period ends on December 31, 2023. On December 31, 2020, management estimates that 88% of the options will vest. On December 31, 2021, that estimate changes to 85%. What is the compensation expense on this share option plan for the year ended December 31, 2021? Question 14 options: a) $92,934 b) $93,783 c) $102,309 d) $105,091
On January 1, 2018, M Company granted 90,000 stock options to certain executives. The options are exercisable no sooner than December 31, 2020, and expire on January 1, 2024. Each option can be exercised to acquire one share of $1 par common stock for $12. An option-pricing model estimates the fair value of the options to be $5 on the date of grant. If unexpected turnover in 2019 caused the company to estimate that 15% of the options would be forfeited, what amount should M recognize as compensation expense for 2019?
On January 1, 2020, Jade Company granted 100 share options each to 500 employees, conditional upon the employees’ remaining in the entity’s employ during the vesting period. The share options vest at the end of a three-year period. On grant date, each share option has a fair value of P30. The par value per share is P100 and the option price is P120. On December 31, 2021, 30 employees have left and it is expected that on the basis of weighted average probability, a further 30 employees will leave before the of the three-year period. On December 31, 2022, only 20 employees actually left and all of the share options are exercised on such date. How much is the compensation expense that should be recognized for 2022?A . 500,000 B. 880,000 C. 380,000 D. 470,000
On January 1, 2020, XYZ Co. granted options to key executives to purchase 100,000 shares of the company's $10 par value Common Stock at an option price of $50 per share. The Black-Scholes option pricing model determines total compensation expense to be $750,000. The options become exercisable after a 2 year service period from the date of grant. Assume all options were exercised in 2022 on the following dates: April 16, 2022– 70,000 options were exercised when the market value per share was $63 September 4, 2022 – 30,000 options were exercised when the market value per share was $72 Prepare a journal entry for: a) January 1, 2020 b) December 31, 2020 c) December 31, 2021 d) April 16th, 2022 e) September 4, 2022
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…
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…
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, 2018, Adams-Meneke Corporation granted 25 million incentive stock options to division managers, each permitting holders to purchase one share of the company’s $1 par common shares within the next sixyears, but not before December 31, 2020 (the vesting date). The exercise price is the market price of the shareson the date of grant, currently $10 per share. The fair value of the options, estimated by an appropriate optionpricing model, is $3 per option. Management’s policy is to estimate forfeitures. No forfeitures are anticipated.Ignore taxes.Required:1. Determine the total compensation cost pertaining to the options on January 1, 2018.2. Prepare the appropriate journal entry to record compensation expense on December 31, 2018.3. Unexpected turnover during 2019 caused an estimate of the forfeiture of 6% of the stock options. Determinethe adjusted compensation cost, and prepare the appropriate journal entry(s) on December 31, 2019 and 2020.
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?
Ultimate Company granted 100 share options to each of its 300 employees on January 2, 2018. The option plan allows the employees to purchase P100 par value ordinary share at P180 per share. The option pricing model used by the company indicated that the fair value of each option on January 2, 2020 was P30. The plan provides that the employees must be employed by the company for the next three years and that the options will expire at the end of 2021.At January 2, 2018, it was estimated that 20% of the employees will leave during the next three years. Actual and revised estimate of employees leaving the company during 2018, 2019 and 2020 are as follows:2018 – 10 employees left; revised estimate is 10% of the remaining options2019 – 15 employees left; revised estimate is 12% of the remaining options2020 – 12 employees left During 2021, 150 of the employees exercised their options while the remaining employees allowed their options to lapse.How much is the compensation expense in 2019?
On January 1, 2021, Adams-Meneke Corporation granted 15 million incentive stock options to division managers, each permitting holders to purchase one share of the company's $1 par common shares within the next six years, but not before December 31, 2023 (the vesting date). The exercise price is the market price of the shares on the date of grant, currently $12 per share. The fair value of the options, estimated by an appropriate option pricing model, is $2 per option. Management's policy is to estimate forfeitures. No forfeitures are anticipated. Ignore taxes. Required: 1. Determine the total compensation cost pertaining to the options on January 1, 2021. 2. Prepare the appropriate journal entry to record compensation expense on December 31, 2021. 3. Unexpected turnover during 2022 caused an estimate of the forfeiture of 5% of the stock options. Prepare the appropriate journal entry(s) on December 31, 2022 and 2023 in response to the new estimate.