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SHARE OPTIONS
SHARE OPTIONS 1. On January |, 2022, an entity granted share options to certain key employees as additional compensation. The options were for 100,000 ordinary shares of P10 par value at an option price of P15 per share. Market price of this share on January 1, 2022 was P20. The fair value of each share option on January 1, 2022 is P&. The options were exercisable immediately beginning January 1, 2022 and expire on December 31, 2023. On December 31, 2022, all share options were exercised. What amount of compensation expense should be reported in 2022? a. 800,000 b. 500,000 c. 200,000 d. 125,000 What amount should be recognized as share premium upon exercise of the share options on December 31, 2022? a. 1,300,000 b. 1,000,000 cc. 500,000 a 900,000 2. On January |, 2022, an entity 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, 2023, 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, 2024, only 20 employees actually left and all of the share options are exercised on such date. What is the compensation expense for 2024? a. 600,000 b. 880,000 c. 380,000 d. 470,000 What is the share premium when the options were exercised on December 31, 2024? a, 2,250,000 b. 2,350,000 ce. 900,000 d. 0 
