On January 2, 2019, ANTMAN Company grants 50 shares each to 400 employees, conditional upon the employees’ remaining in the company’s employ during the vesting period. The shares will vest at the end of 2019 if the company’s earnings increased by more than 15%; or at the end of 2020, if the earnings increased by an average of 12% over the two-year period; or at the end of 2021 if the earnings increased by an average of 10% over the three-year period. The shares have a fair value of ₱25 on January 2, 2019, which is equal to the share price on the grant date. At the end of 2019, earnings had increased by 13% and 20 employees have left and the company expects that earnings will continue to increase at a similar rate in 2020 and expects to vest in 2020. The company also expects that a further 20 employees will leave during 2020. At the end of 2020, earnings increased by only 9% and therefore, shares do not vest at the end of 2020. Also, 15 employees have left the company in 2020 but expects that 10 employees will leave the company in 2021. The company expects that earnings will continue to increase at a similar rate. At the end of 2021, earnings increased by 9% and 5 employees have left the company in 2021. What amount of remuneration expense should the company recognize in its December 31, 2021 income statement? *a. ₱ 154,167b. ₱ 225,000c. ₱ 450,000d. ₱ 70,833

Answered: Image /qna-images/answer/894c4569-d6ba-4067-8b0b-1c00d8b27619.jpg

Answered: ₱ 70,833

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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Question

On January 2, 2019, ANTMAN Company grants 50 shares each to 400 employees, conditional upon the employees’ remaining in the company’s employ during the vesting period. The shares will vest at the end of 2019 if the company’s earnings increased by more than 15%; or at the end of 2020, if the earnings increased by an average of 12% over the two-year period; or at the end of 2021 if the earnings increased by an average of 10% over the three-year period. The shares have a fair value of ₱25 on January 2, 2019, which is equal to the share price on the grant date. At the end of 2019, earnings had increased by 13% and 20 employees have left and the company expects that earnings will continue to increase at a similar rate in 2020 and expects to vest in 2020. The company also expects that a further 20 employees will leave during 2020. At the end of 2020, earnings increased by only 9% and therefore, shares do not vest at the end of 2020. Also, 15 employees have left the company in 2020 but expects that 10 employees will leave the company in 2021. The company expects that earnings will continue to increase at a similar rate. At the end of 2021, earnings increased by 9% and 5 employees have left the company in 2021. What amount of remuneration expense should the company recognize in its December 31, 2021 income statement? *

a. ₱ 154,167

b. ₱ 225,000

c. ₱ 450,000

d. ₱ 70,833

Expert Solution