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? * O 500,000 O 880,000 O 470,000 O 380,000
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? * O 500,000 O 880,000 O 470,000 O 380,000
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 7RE: On January 1, 2019, Phoenix Corporation adopts a performance-based share option plan for 25...
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Transcribed Image Text: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? *
O 500,000
O 880,000
O 470,000
O 380,000
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