ABC Corp. on January 1, 2016, granted share options for 40,000 shares of its €10 par value ordinary shares to its key employees. The market price of the shares on that date was €23 per share and the option price was €20. The Black-Scholes option pricing model determines total compensation expense to be €240,000. The options are exercisable beginning January 1, 2019, provided those key employees are still in ABC's employ at the time the options are exercised. The options expire on January 1, 2020. On January 1, 2019, when the market price of the shares was €29 per share, all 40,000 options were exercised. The amount of compensation expense ABC should record for 2018 under PSAK 53 is Select one: a. €80,000. b. €40,000. C. €0. d. €120,000.

ABC Corp. on January 1, 2016, granted share options for 40,000 shares of its €10 par value ordinary shares to its key employees. The market price of the shares on that date was €23 per share and the option price was €20. The Black-Scholes option pricing model determines total compensation expense to be €240,000. The options are exercisable beginning January 1, 2019, provided those key employees are still in ABC's employ at the time the options are exercised. The options expire on January 1, 2020. On January 1, 2019, when the market price of the shares was €29 per share, all 40,000 options were exercised. The amount of compensation expense ABC should record for 2018 under PSAK 53 is Select one: a. €80,000. b. €40,000. C. €0. d. €120,000.

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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