The fair value of the option on 1 January 2016 was RM5 each and was estimated to rise to RM6.50 each by 31 December 2018. The fair value is determ
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On 1 January 2016, the management of ZAIDY granted an option for 3,000 shares to an
employee on condition that he stays in the employment of ZAIDY for three years. Also, the
option cannot be exercised till the share price has increased to RM20 per share by the end of
the third year.
The fair value of the option on 1 January 2016 was RM5 each and was estimated to rise to
RM6.50 each by 31 December 2018. The fair value is determined taking into consideration
that the share price will rise to more that RM20 each.
Required:
Calculate the amount recognized in the statement of profit or loss and the amount disclosed
as equity in the
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- On April 5, 2017, Gustavo was granted an NQSO for 200 shares of common stock at 50 per share. On the date of the grant, there was no readily ascertainable fair market value for the option. Gustavo exercised the options on March 31, 2018, when the stock was selling for 60 per share. He sold the shares on December 1, 2019, for 75 per share. a. What amount and type of income, if any, will Gustavo have on the exercise date? b. What amount and type of income, if any, will Gustavo have on the date of the sale?On 1 January 2017, SURDIN granted 100 share options to each of its 80 employees, on condition that the employees would stay in employment for three years. SURDIN estimated that 10% of these employees would leave the employment. The fair value of the options was as follows:RM1 January 2017 = RM 5.0031 December 2017 = RM 5.5031 December 2018 = RM 5.9031 December 2019 = RM 5.70Required:Calculate the amount recognized as expenses in the statement of profit or loss and the amount disclosed as equity in the statement of financial positionNiles Company granted 42 million of its no par common shares to executives, subject to forfeiture if employment is terminated within three years. the common shares have a market price of 14 per share on january 1, 2017, the grant date of the restricted stock award. when calculating dilluted EPS at december 31,2018, what will be the net increase in the denominator of teh EPS fraction if the market price of teh common shares averaged 14 per share during 2018?
- On July 1, 2020, Paulina, Inc. granted share options to executives, which options allow them to purchase 20,000 ordinary shares at 25 per share. The options will vest provided that the executives will be employed in the company for the next two years. The options can be exercised for a one-year period starting July 1, 2022. By end of 2020, the market price of Paulina’s ordinary share as P33 per share. The fair value of the options cannot be reliably determined. All executives are expected to remain in the company for the whole vesting period. How much should Paulina charge to compensation expense for the year ended December 31, 2020? a. P0 b. P40,000 c. P80,000 d. P160,000On 30 June 2019, Vivo Berhad granted one of its directors the right to choose either 160,000 shares or receive a cash payment equal to the current value of 100,000 shares at the settlement date on 1 July 2020. On 30 June 2019, the share price was RM 4 and the estimated fair value of the share alternative was RM 3.50 per share. The share must be kept for 2 years if the director chooses the share alternative. Besides, on 30 June 2019, the company acquired a machinery costing RM 20 million in the market. After negotiation with the supplier, the supplier agreed to accept the payment for the machinery either in cash or shares. The supplier has the option to choose either 5 million shares of the company which will be issued in six months’ time or receive cash payment equivalent to 4 million shares in three months’ time. On 30 June 2019, the share price of the company was RM 4. It is estimated that the shares price in three months’ time will be RM 5.50 per shares and will increase to RM 6 in…Isadore Bell Company granted 8 million of its no par common shares to executives, subject to forfeiture if employment is terminated within three years. The common shares have a market price of $3 per share on January 1, 2021, the grant date. When calculating diluted EPS at December 31, 2022, what will be the net increase in the denominator of the EPS fraction if the market price of the common shares averaged $4 per share during 2022?
- Niles Company granted 9 million of its no par common shares to executives, subject to forfeiture if employment is terminated within three years. The common shares have a market price of $5 per share on January 1, 2015, the grant date of the restricted stock award. When calculating diluted EPS at December 31, 2016, what will be the net increase in the denominator of the EPS fraction if the market price of the common shares averaged $5 per share during 2016?On November 1, 2017, Windsor Company adopted a stock-option plan that granted options to key executives to purchase 19,000 shares of the company’s $10 par value common stock. The options were granted on January 2, 2018, and were exercisable 2 years after the date of grant if the grantee was still an employee of the company. The options expired 6 years from date of grant. The option price was set at $40, and the fair value option-pricing model determines the total compensation expense to be $328,000. All of the options were exercised during the year 2020: 4,750 on January 3 when the market price was $67, and 14,250 on May 1 when the market price was $77 a share. Prepare journal entries relating to the stock option plan for the years 2018, 2019, and 2020. Assume that the employee performs services equally in 2018 and 2019. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and…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
- Marconi Corporation awarded fixed options to 100 employees on 1 January 2004 to acquire 20,000 shares of the company. The fair value of the option was determined to be GBP 1.20 using the Black-Scholes models and the exercise price was GBP 3.50 per share (same as the market price at 1 January 2004). Other terms of the options are shown as follows:a. The share option expired five years after the date of the grant.b. The employees must remain employed until 31 December 2006.c. The management estimated a forfeiture rate of 2%. This estimate was revised at the end of each year.d. In 2004, three employees left the firm and the forfeiture rate was revised to 5% at 31 December 2004.e. In 2005, another two employees left the firm and the forfeiture rate was maintained at 5% at 31 December 2005.f. In 2006, three employees left the firm. Required:1. Calculate the remuneration expense relating to the share options for the following years 2004, 2005 and 2006.2. Prepare the journal entries to record…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 July 1, 2016, Tools Company granted share options to key employees for the purchase of 20,000 of the company’s ordinary share capital at P25 per share. Based on option-pricing model used by the company, the fair value of each share option on this date was P9. The options are intended to compensate employees for the next two years. The options are exercisable within a four-year period beginning July 1, 2018 by grantees still in the employ of the company. The market price of Tools’ ordinary share was P33 per share at the date of grant. No share options were terminated during the year. How much should Tools charge to compensations expense for the year ended December 31, 2016?
