In connection with the share option for the benefit of the key employees, Obama Company intends to distribute treasury shares when the options are exercised. These shares were bought in 2016 at P42 per share. On January 01, 2021, Obama granted share options for 10,000 shares at P38 per share as additional compensation for services to be rendered over the next three years. The options are exercisable during a four-year period beginning January 01, 2024, by grantees still employed by the company. Market price of Obama's share was P47 per share at the date of grant. No share options were terminated in 2021. What amount should be reported as compensation expense pertaining to the option in Obama's December 31, 2021 statement of comprehensive income? A.P40,000
In connection with the share option for the benefit of the key employees, Obama Company intends to distribute treasury shares when the options are exercised. These shares were bought in 2016 at P42 per share. On January 01, 2021, Obama granted share options for 10,000 shares at P38 per share as additional compensation for services to be rendered over the next three years. The options are exercisable during a four-year period beginning January 01, 2024, by grantees still employed by the company. Market price of Obama's share was P47 per share at the date of grant. No share options were terminated in 2021. What amount should be reported as compensation expense pertaining to the option in Obama's December 31, 2021 statement of comprehensive income?
A.P40,000
B.P90,000
C.P30,000
D.P-0-
Step by step
Solved in 2 steps