On January 1, 2020, Canada Company granted to a senior executive 10,000 share options conditional upon the executive remaining in the entity's employ until December 31, 2022. However, the share options cannot, be exercised unless the share price has increased from P 50 on January l, 2020 to above P65 on December 31, 2022. If the share price is above P65
On January 1, 2020, Canada Company granted to a senior executive 10,000 share options conditional upon the executive remaining in the entity's employ until December 31, 2022. However, the share options cannot, be exercised unless the share price has increased from P 50 on January l, 2020 to above P65 on December 31, 2022. If the share price is above P65
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
On January 1, 2020, Canada Company granted to a senior executive 10,000 share options conditional upon the executive remaining in the entity's employ until December 31, 2022. However, the share options cannot, be exercised unless the share price has increased from P 50 on January l, 2020 to above P65 on December 31, 2022. If the share price is above P65 on December 31, 2022, the share options can be exercised at any time during the next 5 years. The entity applied a binomial option pricing model and estimated that the fair value of the share option with this market condition on grant date is P24.
What is the compensation expense for 2020?
a. 240,000
b. 80,000
c. 48,000
d. 0
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 2 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education