phantom shares (cash payment equal to the value of 1,200 shares) or 1,500 shares with par value of P60. The grant is conditional upon the completion of three years of service. If the employees chooses the share alternative, the shares must be held for three
On January 1, 2021, Galatians Company grants to its employees the right to choose either 1,200
phantom shares (cash payment equal to the value of 1,200 shares) or 1,500 shares with par value
of P60. The grant is conditional upon the completion of three years of service. If the employees
chooses the share alternative, the shares must be held for three years after the vesting date.
At grant date, the Galatians Company’s share price was P70 per share. At the end of 2021, 2022,
and 2023 the share prices were P73, P79, and P81 respectively. After taking into account the
effects of the post-vesting restrictions, Galatians Company estimates that the fair value at grant
date of the share alternative was P69.
a.) Compensation expense for 2021 – 2023
b.) The amount credited to equity in 2021 – 2023
c.) The amount reported as salaries payable at December 31, 2021 – 2023
d.) Entry in 2023, if the employees chose the cash alternative
e.) Entry in 2023, if the employees chose the equity alternative
Step by step
Solved in 2 steps with 2 images
