Compute the amounts of expense and the related liability and equity components in each

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
icon
Related questions
Question
PDF
3
28°C
Rain
TUTORIAL QUESTION 4.pdf X
+
C
Ⓒ File | C:/Users/acer/Documents/UNIVERSITI%20MALAYSIA%20SABAH/SEMESTER%204%20COURSE/BP22603%20FAR%2011/CHAP... Q
Q
+
(0)
CD Page view A Read aloud | Add textDraw
Highlight
Erase Q
QUESTION 6
On 1.1.2017, MEERA Bhd grants to an employee the right to choose either 12,000 shares or
cash payment equal to the value of 10,000 shares (phantom shares). The grant conditional
upon the employee remaining in the company's employ for three years. If the employee
chooses the share alternative, the shares must be held for three years after vesting date.
At grant date, the company's share price is RM5.00. At the end of year 2017, 2018 and 2019,
the share price is RM5.20, RM5.60 and RM6.20, respectively. After taking into account the
post-vesting transfer restrictions, the grant date fair value of the share alternative is RM4.90.
MEERA shares have a nominal value of RM1 each.
Required:
a) Compute the amounts of expense and the related liability and equity components in each
year.
b) Show the effect if, at the end of year 2019, the employee chooses:
(1)
the cash settlement, and
(ii)
the equity settlement
312
O
of 3
[+]
↓
60
P
4) D
| ✓
...
16:07
10
22/05/2022
Transcribed Image Text:PDF 3 28°C Rain TUTORIAL QUESTION 4.pdf X + C Ⓒ File | C:/Users/acer/Documents/UNIVERSITI%20MALAYSIA%20SABAH/SEMESTER%204%20COURSE/BP22603%20FAR%2011/CHAP... Q Q + (0) CD Page view A Read aloud | Add textDraw Highlight Erase Q QUESTION 6 On 1.1.2017, MEERA Bhd grants to an employee the right to choose either 12,000 shares or cash payment equal to the value of 10,000 shares (phantom shares). The grant conditional upon the employee remaining in the company's employ for three years. If the employee chooses the share alternative, the shares must be held for three years after vesting date. At grant date, the company's share price is RM5.00. At the end of year 2017, 2018 and 2019, the share price is RM5.20, RM5.60 and RM6.20, respectively. After taking into account the post-vesting transfer restrictions, the grant date fair value of the share alternative is RM4.90. MEERA shares have a nominal value of RM1 each. Required: a) Compute the amounts of expense and the related liability and equity components in each year. b) Show the effect if, at the end of year 2019, the employee chooses: (1) the cash settlement, and (ii) the equity settlement 312 O of 3 [+] ↓ 60 P 4) D | ✓ ... 16:07 10 22/05/2022
Expert Solution
steps

Step by step

Solved in 2 steps with 2 images

Blurred answer
Knowledge Booster
Basic Accounting Terms
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education