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.

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter15: Contributed Capital

Section: Chapter Questions

Problem 6P

See similar textbooks

Related questions

Q: Brief Exercise 19-6 (Algo) Stock options; exercise [LO19-2] Under its executive stock option plan,…

A: Common share: It is an equity share. These shareholders are the owners of the company and have…

Q: Ziegler Corporation purchased 25,000 shares of common stock of the Sherman Corporation for $40 per…

A: Revenue from the investment can be calculated by identifying the portion of distributable profit…

Q: You purchase one MBI July 120 put contract (equaling 100 shares) for a premium of $3. You hold the…

Q: Subscription of Shares Gabayan, Inc. has been authorized to issue 125,000 shares of P10 par ordinary…

A: Journal is the first step of recording Transactions in Books , After Journal Ledger Accounts are…

Q: 34

A: Explanations: (a) Total compensation cost = Fair value of stock * Number of shares = $520,000 *…

Q: Norway Company granted 200 shares appreciation rights to each of the 500 employees on January 1,…

A: Total Share Appreciation Rights = No. of rights per employee x No. of Employees = 200 x 500 =…

Q: Item3 Item 3 Feldmann Corporation permits any of its employees to buy shares directly from the…

A: Pre-Tax Earnings: These can be defined as the leftover income of the business after providing for or…

Q: MacroApps Corporation's disclosure notes for the year ending June 30, 2020, included the following…

A: An Employee Stock Purchase Plan (ESPP) is a company-sponsored initiative that enables qualified…

Q: Recording Entries for Equity Investment: Equity Method On January 1, 2020, Allen Corporation…

A: Equity method is one of method used to value of an investment made by an entity in other entity,…

Q: ATC Company issued all of its outstanding shares for P150 in 2018. On January 10, 2019, ATC acquired…

A: Calculations 1 Balance of Share Capital Account on 31 Dec 2019 150,000,000 2 Par value…

Q: On October 15, 2023, the board of directors of Martinez Materials Corporation approved a stock…

A: Share-based compensationThe compensation or commission provided to the employees in the form of…

Q: On January 1, 2020, Elite Company paid P 18,000,000 for 50,000 ordinary shares of Craze Company…

A: Since you have asked multiple question, we will solve the first question for you. If you want any…

Q: Prepare the appropriate journal entry for the expiration of the unexercised options.

A: Companies gives the employees or its executives the options to purchase the stocks and these are…

Q: The stockholders of Meadow Corp, approved a stock-option plan that grants the company's top three…

A: Stock options are financial instruments that give individuals the right, but not the obligation, to…

Q: On 1st January 2019, Brown Plc., had in issue, 800,000 ordinary shares with a par value of sh. 10…

A: Basic earnings per share Basic earnings per share is an estimation of the profit that can be divided…

Q: 38. What is A's capital balance after the admission of C? 39. What is the total partnership capital…

A: As per our protocol we provide solution to the one question only but as you have asked multiple…

Q: On December 1, 2019, Ceniza corporation received a donation of 3,000 shares of its P50 par value…

A: The shares can be of two types common shares and preferred shares. The common shares…

Question

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:
Date
Estimated number of
Employees who will leave the
Actual revenue earned
company
Dec. 31, 2018
2
P80 million
Dec. 31, 2019
2
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
c. P180,000
d. P300.000
P100.000

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

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.

Similar questions

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.
O Share compensation plans: Share-Option Plan Delicious Beer Inc. grants on January 1, 2021, share options to 6 executives to purchase 3000 ordinary shares each with a par value of €1 and exercise price of C23 per share. The total compensotion expense has a fair value of €1800000 at the date of grant. Starting at the grant date, the service perlod is 3 years and the vesting period is 5 years. What journal entry does Delicious Beer Inc. make at year-end 2021 regording the compensotion expense for the 6 executives? Assume that the services are performed equally throughout the years and that no forfeiture of the share-option plans occurred.
z1
Problem 24. On January 1, 2015, ID Inc. granted to an employee the right to choose either: a. 12,000 share (Share or Equity Alternative) (Share options) b. Cash payment equal to market value of 10,000 shares (Cash Alternative) (Share appreciation rights) The grant is conditional upon the completion of three years of service. If the employee chooses the share alternative, the shares must be held for three years after vesting date. The par value of the shares is P25 and at grant date on January 1, 2015, the share price is P51. The share prices for the three-year vesting period are P54 on December 31, 2015, P60 on December 31, 2016 and P65 on December 31, 2017. After taking into account the effects of post-vesting restrictions, the entity has estimated that the fair value of the share or equity alternatives is P48 per share. Required: Based on the result of your audit, determine the following: 1. Compensation expense for year 2015 2. Compensation expense for year 2016 3. Compensation…
Vishnu
1
None
Problem 16-03 Novak Company adopted a stock-option plan on November 30, 2019, that provided that 74,400 shares of $5 par value stock be designated as available for the granting of options to officers of the corporation at a price of $10 a share. The market price was $12 a share on November 30, 2020.On January 2, 2020, options to purchase 29,800 shares were granted to president Tom Winter—14,200 for services to be rendered in 2020 and 15,600 for services to be rendered in 2021. Also on that date, options to purchase 16,600 shares were granted to vice president Michelle Bennett—8,300 for services to be rendered in 2020 and 8,300 for services to be rendered in 2021. The market price of the stock was $15 a share on January 2, 2020. The options were exercisable for a period of one year following the year in which the services were rendered. The fair value of the options on the grant date was $4 per option.In 2021, neither the president nor the vice president exercised their options because…
9
Norway Company granted 200 shares appreciation rights to each of the 500 employees on January 1, 2020. The rights are due to vest on December 31, 2023 with payment being made on December 31, 2023 and expire on December 31,2024. Only 80% of the awards vested. Share Price January 1, 2020 ( Predetermined price) 150 December 31, 2020, 2021, and 2022 180 December 31, 2023 210 December 31, 2024 190 The share appreciation rights were exercised on December 31, 2024. Required: Prepare journal entries from 2020 to 2024 in connection with the share appreciation rights.
Jan 1 2020 - Company a issue 10 million shares common stock for cash Jan 2 2020 - Company a entered into an Agreement with the company president to issue up to 2 million additional shares of common stock based on their net income for the year 2021 . if 2021 net income exceeds 100 million, the president will receive one million shares; if net income exceeds a 120 million the president will receive 2 million shares Net income for the year end 2021 is $110 million, whats the diluted eps for 2020?
#50 Ziegler Corporation purchased 25,000 shares of common stock of the Sherman Corporation for $40 per share on January 2, 2020. Sherman Corporation had 100,000 shares of common stock outstanding during 2021, paid cash dividends of $150,000 during 2021, and reported net income of $500,000 for 2021. Ziegler Corporation should report revenue from investment for 2021 in the amount of Question 50 options: a $125,000. b $87,500. c $37,500. d $137,500.