PROBLEM 33-12 On January 1, 2018, Josh Company granted share options to 10 of its key employees entitling them to acquire P100 par value shares of the company at P110 per share. The share options will vest on December 31, 2020, provided that the employees remain in the company's employ and provided that revenues reach P100 million, the employees will receive 1,000 options each. If revenues reach P150 million, the employees will receive 2,000 options each. If revenues reach P200 million the employees will receive 3,000 options each. The market value of the option on the date of grant is P30. The company has a steady pattern of 25% increase in revenues every year over the last 5 years and expects the same pattern during the vesting period. In addition, the following information were deemed relevant for the computation of the Salaries expense for each year: Estimated number of Employees who will leave the Actual revenue earned Date company Dec. 31, 2018 2 P80 million Dec. 31, 2019 120 million Dec. 31, 2020 3* 200 million *Actual number of employees who left the company. Questions: How much is the salaries expense to be recognized in 2018? P80,000 P100 000 c. P180,000 300 000 2.

PROBLEM 33-12 On January 1, 2018, Josh Company granted share options to 10 of its key employees entitling them to acquire P100 par value shares of the company at P110 per share. The share options will vest on December 31, 2020, provided that the employees remain in the company's employ and provided that revenues reach P100 million, the employees will receive 1,000 options each. If revenues reach P150 million, the employees will receive 2,000 options each. If revenues reach P200 million the employees will receive 3,000 options each. The market value of the option on the date of grant is P30. The company has a steady pattern of 25% increase in revenues every year over the last 5 years and expects the same pattern during the vesting period. In addition, the following information were deemed relevant for the computation of the Salaries expense for each year: Estimated number of Employees who will leave the Actual revenue earned Date company Dec. 31, 2018 2 P80 million Dec. 31, 2019 120 million Dec. 31, 2020 3* 200 million *Actual number of employees who left the company. Questions: How much is the salaries expense to be recognized in 2018? P80,000 P100 000 c. P180,000 300 000 2.

Financial Accounting Intro Concepts Meth/Uses

14th Edition

ISBN:9781285595047

Author:Weil

Publisher:Weil

Chapter15: Shareholders’ Equity: Capital Contributions And Distributions

Section: Chapter Questions

Problem 17E

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On January 1, 2019, Phoenix Corporation adopts a performance-based share option plan for 25 executives, with the number of shares based on the yearly increase in sales. At the end of 2019, based on a 10% increase in sales, it expects that each executive will be granted 150 options and that the fair value of an option expected to vest is 15.75. Phoenix expects a turnover rate of 15% over the 3-year service period. Determine the compensation expense for 2019 for this plan.
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EXERCISE 3 The Red Fox Corporation granted 100 share options to each of its 200 employees on January 1,2020. The option plan entitles the employees to buy a share of the entity's P 200 par ordinary share capital at P 226 per share. Based on an option pricing model used by Red Fox, the fair value of the option on January 1,2020 was determined to be P32. The plan further provides that the employees should be in the service of the company until at least December 31,2022. The options are exercisable starting January 1,2023 and expire on December 31,2024. At January 1,2020, it was estimated that 15% of the employees who received the options will resign during the next three years. During 2020, 10 employees left the company. Át December 31,2020, 15 employees were expected to leave before December 31,2022. During 2021, 12 more employees left, and at the end of the year, it was expected that 5 more would resign before December 31,2022; although é employees left during 2022. Employees numbering…
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Problem 1 (Adapted)On January 1, 2017, Gliezel company issued options to key employees to purchase 20,000 ordinary shares of P100 par value at P125 per share. On such date, the market value of ordinary share is P150 per share. The fair value of each share option is P30. These options are exercisable starting January 1, 2019 and expire one year after. Options covering 17,500 shares are exercised on January 15, 2019 and the remaining options expired. a. Compute compensation expense for the year 2017, 2018 and 2019.b. Prepare journal entries to record the compensation each year as well as the exercise and expiration of the share options
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Problem 4: (Share-based compensation: Share options) On January 1, 2020, COLOR Company granted 250 share options to 300 employees, conditional upon the employees remaining in the entity’s employ during the vesting period. The share options will vest over a three-year period. The fair value of each share option is ₱50. By the end 0f 2020, 25 employees have left and based on a weighted average probability, a further 20 employees will leave during the vesting period. By the end of 2021, only 10 employees have left and a further 28 employees will leave during 2022. By the end of 2022, only 30 employees left the entity. All share options are exercised at December 31, 2022. G. Fill in the amounts per individual account based on the exercise of the options on December 31, 2022 14. Debit to Cash?15. Debit to Share options outstanding?
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Problem 4: (Share-based compensation: Share options) On January 1, 2020, COLOR Company granted 250 share options to 300 employees, conditional upon the employees remaining in the entity's employ during the vesting period. The share options will vest over a three-year period. The fair value of each share option is P50. By the end of 2020, 25 employees have left and based on a weighted average probability, a further 20 employees will leave during the vesting period. By the end of 2021, only 10 employees have left and a further 28 employees will leave during 2022. By the end of 2022, only 30 employees left the entity. All share options are exercised at December 31, 2022. Requirements: E. Prepare all necessary entries for the year. F. Compute for the compensation expense for: 11. 2020 12. 2021 13. 2022