Performance Based Share Option Plan On January 1 2016 Rhine Company
Performance-Based Share Option Plan On January' 1, 2016, Rhine Company adopts a performance-based share option plan for its 80 key executives. Each executive is granted a maximum of 70 share options, but the number of options that vest depends on the percentage increase in Rhine’s sales over a 3-ycar service period. If by December 31, 2018, sales have increased by at least 10%, 50 options wall vest for each executive; if sales have increased by at least 15%, all 70 options will vest. On the grant date, Rhine estimates that its sales will increase by 12% over the service period, and that its employee turnover rate over the 3-vcar service period will be 6%. It also determines that the fair value of an option expected to vest is $13.40. At the end of 2018, actual sales had increased by 16% tor the service period, and the actual turnover was 6 key executives for the service period.
Required:
1. Prepare a schedule of Rhine’s computations for its compensatory' share option plan for 2016 through 2018 (round all computations to the nearest dollar).
2. Prepare the compensation expense journal entry' for 2016.
Membership TRY NOW
  • Access to 800,000+ Textbook Solutions
  • Ask any question from 24/7 available
    Tutors
  • Live Video Consultation with Tutors
  • 50,000+ Answers by Tutors
OR
Relevant Tutors available to help