By what net amount should equity increase as a result of the grant and exercise of the options?
By what net amount should equity increase as a result of the grant and exercise of the options?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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On Jan. 1, 2020, GARBO Company granted XYZ, its executive, compensatory share options to buy 10,000 share of P10 par value. The options call for a price of P20 per share and are exercisable in 3 years following grant date. XYZ exercised the options on December 31, 2020. The market price of the share was P60 on January 1, 2020 and P70 on December 31,2020. The fair value of the share option is P30 on the date of grant. By what net amount should equity increase as a result of the grant and exercise of the options?
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