Company A has issued stock options to an employee that vest based on only continued service in installments. The employee was granted 300 options, 100 vest if the employee continues in service for one year, a further 100 vest after two years and the final 100 vest after three years. The fair value of the options is $9 per share. The company has determined that the
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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.On January 2, 2019, Brust Corporation grants its new CFO 2,000 restricted share units. Each of the time-vested restricted share units entitles the CFO to receive one share of Brust common stock if she remains an employee of the company for 4 years. On January 2, 2019, shares of Brusts 1 par value common are trading at 29.50 per share. The company estimates that the CFO will complete all 4 years of required service with the company. Prepare the journal that Brust should make each year to account for the restricted share units.On January 1, Year 1, Sisig Corp. granted 60,000 share options to employees. The share options will vest at the end of three years provided the employees remain in service until then. The option price is P60 and the par value per share is P50. At the date of grant, the entity concluded that the fair value of the share options cannot be measured reliably. The share options have a life of 4 years which means that the share options can be exercised within one year after vesting. The share prices are P62 on December 31, Year 1, P66 on December 31, Year 2, P75 on December 31, Year 3 and P85 on December 31, Year 4. All share options were exercised on December 31, Year 4. What is the compensation expense for Year 4? A. 660,000 B. 0 C. 600,000 D. 900,000
- On January 1, Year 1, Jenny Corp. granted 60,000 share options to employees. The share options will vest at the end of three years provided the employees remain in service until then. The option price is P60 and the par value per share is P50. At the date of grant, the entity concluded that the fair value of the share options cannot be measured reliably. The share options have a life of 4 years which means that the share options can be exercised within one year after vesting. The share prices are P62 on December 31, Year 1, P66 on December 31, Year 2, P75 on December 31, Year 3 and P85 on December 31, Year 4. All share options were exercised on December 31, Year 4. 1. What is the compensation expense for Year 4? A. 0 B. 900k C. 600k D. 660kOn January 1, 2020, ABC Company granted 80,000 share options to employees. The share options will vest at the end of three years provided the employees remain in service until then. The option price is P65 and the par value per share is P50.At the date of grant, the entity concluded that the fair value of the share options cannot be measured reliably.The share options have a life of 4 years which means that the share options can be exercised within one year after vesting. The share prices are P68 on December 31, 2020, P74 on December 31, 2021, P82 on December 31, 2022 and P90 on December 31, 2023. All share options were exercised on December 31, 2023.What is the compensation expense for 2022?On January 1, 2020, Myeoong Company granted 60,000 share options to employees. The share options will vest at the end of three years provided the employees remain in service until then. The option price is P60 and the par value per share is P50.At the date of grant, the entity concluded that the fair value of the share options cannot be measured reliably. The share options have a life of 4 years which means that the share options can be exercised within one year after vesting. The share prices are P62 on December 31, 2020, P68 on December 31, 2021, P76 on December 31, 2022 and P85 on December 31, 2023. All share options were exercised on December 31, 2023.What is the share premium upon exercise of the share options on December 31, 2023?
- On January 1, 2020, The Akira Corporation granted stock options to one of its employees. The options allow the employee to purchase 10,000 common Akira shares with par value of $ 5 to $ 20 each. On the grant date, the Black-Scholes option pricing model indicated that the fair value of the options was $ 220,000. The options can be exercised beginning on January 1, 2022, after the employee has provided two years of service to the company. Assuming that the company closes books on December 31 of each year, what impact does the adjustment transaction at 12/31/20 related to this event have on the Net income (presented in the Statement of Income and Expenses) Total Equity of the Shareholders (after closing) Select one: to. Decrease of $ 220,000 Zero b. Decrease of $ 110,000 Decrease of $ 110,000 c. $ 110,000 increase Decrease of $ 110,000 d. Decrease of $ 110,000 ZeroOn January 1, 2024, Jingrong Corporation granted stock options to key employees for the purchase of 81,000 shares of the company's common stock at $28 per share. The options are intended to compensate employees for the next two years. The options are exercisable within a four-year period beginning January 1, 2026, by the grantees still in the employ of the company. No options were terminated during 2024, but the company does have an experience of 6% forfeitures over the life of the stock options. The market price of the common stock was $34 per share at the date of the grant. Jingrong Corporation used the Binomial pricing model and estimated the fair value of each of the options at $10. What amount should Jingrong charge to compensation expense for the year ended December 31, 2024?On January 1, 2024, Jingrong Corporation granted stock options to key employees for the purchase of 81,000 shares of the company's common stock at $28 per share. The options are intended to compensate employees for the next two years. The options are exercisable within a four-year period beginning January 1, 2026, by the grantees still in the employ of the company. No options were terminated during 2024, but the company does have an experience of 6% forfeitures over the life of the stock options. The market price of the common stock was $34 per share at the date of the grant. Jingrong Corporation used the Binomial pricing model and estimated the fair value of each of the options at $10. What amount should Jingrong charge to compensation expense for the year ended December 31, 2024? Multiple Choice $405,000 $810,000 $380,700 $761,400
- On January 1, 2022, Ron Corp. granted stock options to key employees for the purchase of 80,000 shares of the company's common stock at $25 per share. The options are intended to compensate employees for the next two years. The options are exercisable within a four-year period beginning January 1, 2024, by the grantees still in the employ of the company. No options were terminated during 2022, but the company does have an experience of 4% forfeitures over the life of the stock options. The market price of the common stock was $31 per share at the date of the grant. G Corp. used the Binomial pricing model and estimated the fair value of each of the options at $10. What amount should Ron charge to compensation expense for the year ended December 31, 2022? A. $307,200. B. $320,000. C. $384,000. D. $400,000.On January 1, Year 1, Spaghetti Corp. granted 100 share options each to 500 employees, conditional upon the employee’s remaining in the entity’s employ during the vesting period. The share options vest at the end of a three-year period. On grant date, each share option has a fair value of P30. The par value per share is P100 and the option price is P120. On December 31, Year 2, 30 employees have left and it is expected that on the basis of a weighted average probability, a further 30 employees will leave before the end of the three-year period. On December 31, Year 3, only 20 employees actually left and all of the share options are exercised on such date. What is the compensation expense for Year 3? A. 880,000 B. 470,000 C. 380,000 D. 500,000On January 1, 2020, Easy Company granted 30,000 share options to employees. The share options will vest at the end of three years provided the employees remain in service until then. The option price is P60 and the entity's share price is also P60 at the date of grant. The par value of the share is P50. At the date of grant, the entity concluded that the fair value of the share options cannot be estimated reliably. The share options have a life of 6 years. This means that the options can be exercised within three years after vesting. All share options vested at the end of three years and no employees left during the three- year period. The share prices and the number of share options exercised are set out below. Share Price Share options exercised at year-end 2020 63 2021 66 2022 75 2023 88 10,000 2024 100…
