10. Melissa Corporation granted share options to its employees with a fair value of P4,500,000 on January 1, 2012. The options vest in three years and the options are exercisable starting January 1,2015 until December 31, 2016. On December 31, 2012, it was estimated that 5% of employees will leave the entity during the vesting period. This estimate was revised to 6% during the year 2013. On December 31, 2014, employees record indicates that 90% of the employees stayed and became entitled to the options.

10. Melissa Corporation granted share options to its employees with a fair value of P4,500,000 on January 1, 2012. The options vest in three years and the options are exercisable starting January 1,2015 until December 31, 2016. On December 31, 2012, it was estimated that 5% of employees will leave the entity during the vesting period. This estimate was revised to 6% during the year 2013. On December 31, 2014, employees record indicates that 90% of the employees stayed and became entitled to the options.

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

Chapter13: Investments And Long-term Receivables

Section: Chapter Questions

Problem 17P

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On Jan. 1, 2010, EASY Company granted ABC, its executive, compensatory share options to buy 10,000 share of P10 par value. The options call for a price of P20 per share and are exercisable in 3 years following grant date. ABC exercised the options on December 31, 2010. The market price of the share was P60 on January 1, 2010 and P70 on December 31,2010. The fair value of the share option is P30 on the date of grant. By what net amount should equity increase as a result of the grant and exercise of the options?
On January 1, 2016, Dan Corporation granted an employee an option to purchase 3,000 shares of Dan’s P5 par value ordinary share at P20 each. The option became exercisable on December 31, 2018. The option was exercised on January 10, 2019.The market prices of Dan’s share capital were as follows:January 1, 2016 – P30; December 31, 2016 – P50; January 10, 2019 – P45. The company cannot reliably determine the fair value of the share option, so it decided to use the intrinsic value method. For the year 2016, how much should Dan recognize as compensation expense?
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On January 1, 2022, Amber Company granted the president compensatory share options to buy 10,000 ordinary shares of P10 par value. The options call for a price of P20 per share and are exercisable in 3 years following the grant date. The president exercised the options on December 31, 2022. The market price of the share was P60 on January 1, 2022 and P70 on December 31, 2022. The fair value of the share option is P30 on the date of grant. What amount should Amber Company report as compensation expense for 2022? ANSWER: 150,000 Show full solution
On January 1,2020, V Co. issued 100 share options to each of its 15 executive officers. The options vest at the end of a 4-year period. On the date of grant, each share option had a fair value of P 10. V expects that all 1,500 options will vest. After the 4 year period, all executives are still in the employ of V Co. and 7 executives exercised their option and purchased the shares for P 17 each. The par value of each share is P 15. 1. How much is the compensation expense for the 3rd year in the vesting period if 5 of the executives left in the 3rd year of the vesting period? 2. How much is the compensation expense for the 3rd year in the vesting period if 2 of the executives left in the 3rd year of the vesting period?
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On October 15, 2022, East Company approved a share option plan for key executives. On January 1, 2023, 200,000 share options were granted exercisable for 200,000 ordinary shares at P10 par value. The options are exercisable between January 1, 2026 and December 31, 2028, at 80% of the quoted market price on January 1, 2023 which was P15. The fair value of the 200,000 options estimated by an appropriate option pricing model is P6 per option. Twenty thousand options were forfeited when an executive resigned in 2024. All other options were exercised on July 1, 2026 when the share price jumped unexpectedly to P20.What amount should East Company credit to share premium upon exercise of options in 2026? 1,440,000 1,560,000 2,160,000 1,600,000