On January 1, 20x1, SUMMER HEAT Co. grants 1,000 share options to each of its 100 key employees conditional upon each employee remaining in SUMMER’s employ over the next three years. SUMMER estimates that the fair value of each share option is ₱60. On the basis of a weighted average probability, THRIVE Co. estimates on December 31, 20x1 and December 31, 20x2 that 20 per cent of the employees will leave during the three-year period and therefore forfeit their rights to the share options. Twenty (20) employees actually left the company during the three-year period. Fifteen (15) employees left in 20x1 and the other five (5) left in 20x3. How much is the salaries expense in 20x3? *
On January 1, 20x1, SUMMER HEAT Co. grants 1,000 share options to each of its 100 key employees conditional upon each employee remaining in SUMMER’s employ over the next three years. SUMMER estimates that the fair value of each share option is ₱60. On the basis of a weighted average probability, THRIVE Co. estimates on December 31, 20x1 and December 31, 20x2 that 20 per cent of the employees will leave during the three-year period and therefore forfeit their rights to the share options. Twenty (20) employees actually left the company during the three-year period. Fifteen (15) employees left in 20x1 and the other five (5) left in 20x3. How much is the salaries expense in 20x3? *
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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On January 1, 20x1, SUMMER HEAT Co. grants 1,000 share options to each of its 100 key employees conditional upon each employee remaining in SUMMER’s employ over the next three years. SUMMER estimates that the fair value of each share option is ₱60. On the basis of a weighted average probability, THRIVE Co. estimates on December 31, 20x1 and December 31, 20x2 that 20 per cent of the employees will leave during the three-year period and therefore forfeit their rights to the share options. Twenty (20) employees actually left the company during the three-year period. Fifteen (15) employees left in 20x1 and the other five (5) left in 20x3. How much is the salaries expense in 20x3? *
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