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There is one question I just need to make sure my answers is correct or not:
An Entity grants one hundred share option to each of its five directors on 1 July 20X4, the option vest
On 30 Jun 20X8. what will be the accounting entry in the financial statements ended 30 June 20X5?A. Increase equity $2,500, increase in expenses through profit or loss $2,500.
B. Increase equity $500, increase in expenses through profit or loss $500.
C. Increase equity $625, increase in expenses through profit or loss $625.
D. Increase equity $1250, increase in expenses through profit or loss $1250.My answer is C $625
100 Share x 5 Director x $5 = $2,500 Jul 20X4 To Jun 20X8 = 4 Years
2500÷ 4 = 625Is it correct ?
So sorry Wesbyss : one line missed when I past from another file here is the complete question
An Entity grants one hundred share options to each of its five directors on 1 July 20X4, the option vest
on 30 Jun 20X8. The Fair Value of each option on 1 July 20X4 is $5 and it is anticipated that all of the share option will vest on 30 June 20X8.what will be the accounting entry in the financial statements ended 30 June 20X5?
Increase equity $2,500, increase in expenses through profit or loss $2,500.
Increase equity $500, increase in expenses through profit or loss $500.
Increase equity $625, increase in expenses through profit or loss $625.
Increase equity $1250, increase in expenses through profit or loss $1250.I beg to differ on this one , from 1 July ,20X4 to 30 June 20X8 its for years , that is the vesting period but the question as specified that ” what accounting entries in the financial statements to 30June ,20X5? which is 2yrs and not for years. so its ” 2/4 x $5 x 100 x 5 = $ 1,250. not $625
I beg to differ on this one , from 1 July ,20X4 to 30 June 20X8 its 4 years , that is the vesting period but the question as specified that ” what accounting entries in the financial statements to 30June ,20X5? which is 2yrs and not for years. so its ” 2/4 x $5 x 100 x 5 = $ 1,250. not $625
@mcdaniels said:
I beg to differ on this one , from 1 July ,20X4 to 30 June 20X8 its 4 years , that is the vesting period but the question as specified that ” what accounting entries in the financial statements to 30June ,20X5? which is 2yrs and not for years. so its ” 2/4 x $5 x 100 x 5 = $ 1,250. not $625The share options have been granted on 1July 20X4, so to 30 June 20X5 is 1 year, not 2!
The correct answer is hence 625.30 June X5 1/4
30 June X6 2/4
30 June X7 3/4
30 June X8 4/4
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