Kindly show the explanation PROBLEM 33-12On January 1, 2018, Josh Company granted share options to 10 of its key employeesentitling them to acquire P100 par value shares of the company at P110 per share. Theshare options will vest on December 31, 2020, provided that the employees remain in thecompany's employ and provided that revenues reach P100 million, the employees willreceive 1,000 options each. If revenues reach P150 million, the employees will receive2,000 options each. If revenues reach P200 million the employees will receive 3,000options each.The market value of the option on the date of grant is P30. The company has a steadypattern of 25% increase in revenues every year over the last 5 years and expects the samepattern during the vesting period.In addition, the following information were deemed relevant for the computation of theSalaries expense for each year:DateEstimated number ofEmployees who will leave theActual revenue earnedcompanyDec. 31, 20182P80 millionDec. 31, 20192120 millionDec. 31, 20203*200 million*Actual number of employees who left the company.Questions:How much is the salaries expense to be recognized in 2018?P80,000c. P180,000d. P300.000P100.000

The fair value at grant date i.e P30 will be taken for expense calculation. The share options will…

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How much is the salaries expense to be recognized in 2018? P80,000 P100.000 c. P180,000 d. P300.000

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

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