3. On the basis of a weighted average probability, SUFFUSE Co. estimates on January 1, 20x1 that 20 per cent of employees (100 x 20% - 20 employees) will leave during the three-year period and therefore forfeit their rights to the share options. During 20x1, 2 employees left. The entity revised its estimate of total employee departures over the three-year period from 20 per cent (20 employees) to 15 per cent (15 employees). During 20x2, additional 3 employees left. The entity revised its estimate of total employee departures over the three-year period from 15 per cent to 12 per cent (12 employees). During 20x3, additional 5 employees left. Hence, a total of 10 employees forfeited their rights to the share options dunng the three-year period, and a total of 90,000 share options (0 mployees x 1,000 options per employee) vested at the end of 203. Provide all the necessary journal entries.

3. On the basis of a weighted average probability, SUFFUSE Co. estimates on January 1, 20x1 that 20 per cent of employees (100 x 20% - 20 employees) will leave during the three-year period and therefore forfeit their rights to the share options. During 20x1, 2 employees left. The entity revised its estimate of total employee departures over the three-year period from 20 per cent (20 employees) to 15 per cent (15 employees). During 20x2, additional 3 employees left. The entity revised its estimate of total employee departures over the three-year period from 15 per cent to 12 per cent (12 employees). During 20x3, additional 5 employees left. Hence, a total of 10 employees forfeited their rights to the share options dunng the three-year period, and a total of 90,000 share options (0 mployees x 1,000 options per employee) vested at the end of 203. Provide all the necessary journal entries.

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Show working note and explain your answer
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