What amount should be recognized as compensation expense for the current year?*see attacheda. 600,000b. 300,000c. 800,000d. 400,000 At the beginning of the current year, Kilua Company granted share optionsto key employees for the purchase of Php40,000 shares at Php25 per share.The options are intended to compensate employees for the next two years.The options are exercisable within a four-year period after vesting bygrantees still in the employ of the entity.The market price of the share was Php40 at the date of grant. The fairvalue of each share option is Php20. No share options were terminatedduring the current year.

The shares given to the employees of the company, keeping their good performance in mind or due to…

Answered: mpensation expense for the current year

Business

Accounting

mpensation expense for the current year

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 7RE: On January 1, 2019, Phoenix Corporation adopts a performance-based share option plan for 25...

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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, 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.
At the beginning of Year 4, ABC Corp. grants to a senior executive 3,000 share options, conditional upon the executive's remaining in the entity's employ until the end of Year 6. The exercise price is P40. However, the exercise price drops to P30 if the entity's earnings increase by at least an average of 10% per year over the three-year period. On grant date, the entity estimates that the fair value of the share options, with an exercise price of P30, is P15 per option. If the exercise price is P40, the entity estimates that the share options have a fair value of P12 per option. During Year 4, the entity's earnings increased by 12%, and the entity expects that earnings will continue to increase at this rate over the next two years. The entity therefore expects that the earnings target will be achieved, and hence the share options will have an exercise price of P30. During Year 5, the entity's earnings increased by 13%, and the entity continues to expect that the earnings target will…
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. 500,000
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