On January 1, 2020, Bloody Red Company issued to its chief executive officer share options for the purchase of the company's ordinary share at a strike price of P 50. The options are exercisable, beginning January 1,2023 and expire on December 31,2024. The options may be exercised only if the officer is still in the employ of the company at the date of the exercise. The share options are valued at P 30 per share on January 1,2020 based on the option-pricing model used by the company. The number of share options granted will be based on the following sales level for the year 2022: Level of Sales Number of Options Below P 3,000,000 Nil P 30,0000 – P 50,000,000 10,000 shares Over P 50,000,000- P 70,000,000 15,000 shares Over P 70,000,000 18,000 shares Estimates of the sales for 2022 were as follows: 2022 Estimated sales Estimate made at January 1, 2020 P 35,000,000 December 31,2020 52,000,000 December 31,2021 70,000,000 Actual sales for 2022 were P 75,000,000. REQUIRED: Prepare all entries in 2020 through 2022 related to the above data.

On January 1, 2020, Bloody Red Company issued to its chief executive officer share options for the purchase of the company's ordinary share at a strike price of P 50. The options are exercisable, beginning January 1,2023 and expire on December 31,2024. The options may be exercised only if the officer is still in the employ of the company at the date of the exercise. The share options are valued at P 30 per share on January 1,2020 based on the option-pricing model used by the company. The number of share options granted will be based on the following sales level for the year 2022: Level of Sales Number of Options Below P 3,000,000 Nil P 30,0000 – P 50,000,000 10,000 shares Over P 50,000,000- P 70,000,000 15,000 shares Over P 70,000,000 18,000 shares Estimates of the sales for 2022 were as follows: 2022 Estimated sales Estimate made at January 1, 2020 P 35,000,000 December 31,2020 52,000,000 December 31,2021 70,000,000 Actual sales for 2022 were P 75,000,000. REQUIRED: Prepare all entries in 2020 through 2022 related to the above data.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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