phantom shares (cash payment equal to the value of 1,200 shares) or 1,500 shares with par value of P60. The grant is conditional upon the completion of three years of service. If the employees chooses the share alternative, the shares must be held for three
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On January 1, 2021, Galatians Company grants to its employees the right to choose either 1,200
phantom shares (cash payment equal to the value of 1,200 shares) or 1,500 shares with par value
of P60. The grant is conditional upon the completion of three years of service. If the employees
chooses the share alternative, the shares must be held for three years after the vesting date.
At grant date, the Galatians Company’s share price was P70 per share. At the end of 2021, 2022,
and 2023 the share prices were P73, P79, and P81 respectively. After taking into account the
effects of the post-vesting restrictions, Galatians Company estimates that the fair value at grant
date of the share alternative was P69.
a.) Compensation expense for 2021 – 2023
b.) The amount credited to equity in 2021 – 2023
c.) The amount reported as salaries payable at December 31, 2021 – 2023
d.) Entry in 2023, if the employees chose the cash alternative
e.) Entry in 2023, if the employees chose the equity alternative
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- On January 2, 2019, Brust Corporation grants its new CFO 2,000 restricted share units. Each of the time-vested restricted share units entitles the CFO to receive one share of Brust common stock if she remains an employee of the company for 4 years. On January 2, 2019, shares of Brusts 1 par value common are trading at 29.50 per share. The company estimates that the CFO will complete all 4 years of required service with the company. Prepare the journal that Brust should make each year to account for the restricted share units.On January 1, 2020, ABC Company granted to employees a share-based payment with cash and share alternative.The provisions include the right to a cash payment equal to the value of 10,000 phantom shares or 15,000 ordinary shares with a par value of P40.The grant is conditional upon the completion of three years’ service. If the employees choose the share alternative, the shares must be held for three years after the vesting date.At grant date, the share price is P60. At the end of 2020, 2021 and 2022 the share prices are P63, P66 and P72, respectively.After taking into account the effect of vesting restrictions, the entity estimated that the fair value of the share alternative on grant date is P45.On January 1, 2023, the employees selected the share alternative.What is the equity component on January 1, 2020, arising from the share-based payment with cash and share alternative?On January 1, 2020, ABC Company granted to employees a share-based payment with cash and share alternative. The provisions include the right to a cash payment equal to the value of 10,000 phantom shares or 15,000 ordinary shares with a par value of P40. The grant is conditional upon the completion of three years’ service. If the employees choose the share alternative, the shares must be held for three years after the vesting date.At grant date, the share price is P60. At the end of 2020, 2021 and 2022 the share prices are P63, P66 and P72, respectively.After taking into account the effect of vesting restrictions, the entity estimated that the fair value of the share alternative on grant date is P45. On January 1, 2023, the employees selected the share alternative.What amount of share premium should be recorded from the issuance of shares on January 1, 2023?
- On January 1, 2018, Permission to Dance Inc. grants to an employee the right to choose either 1,000 phantom shares (i.e. a right to a cash payment equal to the fair value of 1,000 shares) or 1,200 shares with a par value of P10 per share. The grant is conditional upon the completion of three years’ service. If the employee chooses the share alternative, the shares must be held for three years after the vesting date. At the date of grant, the entity’s share price is P50 per share. At the end of year 2018, 2019 and 2020, the share price is P52, P55 and P60, respectively. The entity does not expect to pay dividends in the next three years. After taking into account the effects of the post-vesting transfer restrictions, the entity estimates that the grant date fair value of the share alternative is P48 per share. If the employee has chosen the cash alternative, the amount to be paid at the end of 2020 should be?On January 2, 2021, Gray Company grants 50 shares each to 400 employees, conditional upon the employees' remaining in the company's employ during the vesting period. The shares will vest at the end of 2021 if the company's earnings increased by more than 15%; or at the end of 2022 if the earnings increased by an average of 12% over the two-year period; or at the end of 2022 if the earnings increased by an average of 10% over the three-year period. The shares have a fair value of P25 on January 2, 2021, which is equal to the share price on the grant date. At the end of 2021, earnings had increased by 13% and the company expects that earnings will continue to increase at a similar rate in 2022 and expects to vest in 2022. At the end of 2022,earnings increased by only 9% and therefore shares do not vest at the end of 2022. The company expects that earnings will continue to increase at similar rate. At the end of 2023, earnings increased by 9%. I The amount of remuneration expense should…On January 2, 2021, ABC Company grants 50 shares each to 400 employees, conditional upon the employees' remaining in the company's employ during the vesting period. The shares will vest at the end of 2021 if the company's earnings increased by more than 15%; or at the end of 2022 if the earnings increased by an average of 12% over the two-year period; or at the end of 2022 if the earnings increased by an average of 10% over the three-year period. The shares have a fair value of P25 on January 2, 2021, which is equal to the share price on the grant date. At the end of 2021, earnings had increased by 13% and the com pany expects that earnings will continue to increase at a similar rate in 2022 and expects to vest in 2022. At the end of 2022, earnings increased by only 9% and therefore shares do not vest at the end of 2022. The company expects that earnings will continue to increase at similar rate. At the end of 2023, earnings increased by 9%. The amount of remuneration expense should…
- On January 1, 2018, Choosy Co. granted to an employee the right to choose either shares or cash payment. The choices are as follows: • Share Alternative: Equal to 25,000 shares with par value of P40. • Cash Alternative: Cash payment equal to the market value of 21,000 shares. The grant is conditional upon the completion of three years of service. On the grant date, on January 1, 2018, the share price P36. The share prices for the three year period are as follows: December 31, 2018 P46 December 31, 2019 P54 December 31, 2020 P60 After taking into account the effect of vesting restriction, Choosy Co. has estimated that the fair value of the share alternative is P45. 1. What is the compensation to be recognized in December 31, 2018? 2. What is the compensation to be recognized in December 31, 2019? 3. What is the compensation to be recognized in December 31, 2020? 4. Assuming on December 31, 2020 the employee opted to receive the Cash Alternative, what is the share premium to be…On January 1, 2020, Gabriela & Inc. granted to its CEO the right to choose either:· Ordinary share (P25 par): 10,000 shares· Cash payment equal 7,500 shares of P25 par ordinary sharesThe grant will vest, provided that the CEO remained in the company for a period of three years. If the CEO opts for the share alternative, he/she shall hold the shares for a period of three years after the vesting date. On the date of grant, the share price of the ordinary share is P50. The ordinary share price for the each of the vesting period is as follows:· December 31, 2020: P52· December 31, 2021: P57· December 31, 2022: P61Based on the available information of the entity, the entity estimated that the fair value of the share alternative is P48 per share. How much is the compensation expense for 2021, arising from the equity alternative and cash alternative, respectively? a. 35,000 ; 200,000 b. 35,000 ; 142,500 c. 105,000 ; 427,500 d. 35,000 ;…On January 1, 2020, Ruby Red Company granted to each of its four executives the right to choose either 1,000 ordinary shares or to receive cash payment equal to 900 shares. The grant is conditional upon the complecion of three years of service. The entity estimates that the value of the share alternative on January 1,2020 is P 150 per share. Ruby Red's ordinary share capital has a par value P 100. The following table shows the fair value of Ruby Red's ordinary share: January 1,2020 P P 158 December 31, 2020 160 December 31, 2021 165 December 31, 2022 168 December 31, 2023 172 One executive exercise his right to receive the cash alternative on December 31, 2022; the others chose to receive the ordinary shares on December 31, 2023. REQUIRED: a.) Determine the amount assigned to equity on January 1,2020. b.) Compute the amount charged to Compensation Expense during the years 2020, 2021,2022 and 2023 as a result of the foregoing. c.) Prepare all the entries relating to the above during the…
- On January 1, 2018, Red Inc. grants to an employee the right to choose either 1,000 phantom shares (i.e. a right to a cash payment equal to the fair value of 1,000 shares) or 1,200 shares with a par value of P10 per share. The grant is conditional upon the completion of three years' service. If the employee chooses the share alternative, the shares must be held for three years after the vesting date. At the date of grant, the entity's share price is P50 per share. At the end of year 2018, 2019 and 2020, the share price is P52, P55 and P60, respectively. The entity does not expect to pay dividends in the next three years. After taking into account the effects of the post-vesting transfer restrictions, the entity estimates that the grant date fair value of the share alternative is P48per share. If the employee has chosen the cash alternative, the amount to be paid at the end of 2020 should be A.P60,000B.P52,000C.P55,000D.P67,600On January 1,2019, an entity granted to an officer the right to choose either - 5,000, P 25 par ordinary shares or - cash payment equal to 3,500 shares of P 25 par ordinary shares The grant is conditional upon the completion of three years of service. If the officer chooses the share alternative, the shares must be held for three years after the vesting date. On January 1,2019, the price per ordinary share is P 28. The ordinary share prices for the three- year vesting period are: December 31,2019- P 30 December 31,2020- P 35 December 31,2021- P 40 After taking into account the effects of post vesting restrictions, the entity had estimated that the fair value of the share alternative is P 45 per share. How much is accounted for as equity as of January 1,2019? How much is accounted for as a liability as of January 1,2019?On January 1, 2024, Cori Ander Herbs granted restricted stock units (RSUs) representing 300,000 of its $1 par common shares to executives, subject to forfeiture if employment is terminated within three years. After the recipients of the RSUs satisfy the vesting requirement, the company will distribute the shares. The common shares had a market price of $13 per share on the grant date. At the date of grant, the company anticipated that 5% of the recipients would leave the firm prior to vesting. In 2025, 1% of the options are forfeited due to executive turnover. The company chooses the option not to estimate forfeitures. What amount should the company record as compensation expense for the year ended December 31, 2025?