Question: I need the answer as soon as possible Question 3 Santosh Ltd. granted 500 options to each of its 2,500 employees in 2011 at an

I need the answer as soon as possible I need the answer as soon as possible Question 3 Santosh Ltd.

Question 3 Santosh Ltd. granted 500 options to each of its 2,500 employees in 2011 at an exercise price of 50 when the market price was the same. The contractual life (vesting and exercise period) of the options granted is 6 years with the vesting period and exercise period being 3 years each. The expected life is 5 years and the expected annual forfeitures are estimated at 3 per cent. The fair value per option is arrived at 15. Actual forfeitures in 2011 were 5 per cent. However at the end of 2011 the management of Santosh Ltd. still expects that the actual forfeitures would average only 3 per cent over the entire vesting period. During 2012 the management revises its estimated average forfeiture rate to 10 per cent per annum over the entire vesting period. Of the 2,500 employees 1,900 employees have completed the 3 year vesting period. 1,000 employees exercise their right to obtain shares vested in them in pursuance of ESOP at the end of 2015 and 500 employees exercise their right at the end of 2016. The rights of the remaining employees expire unexercised at the end of 2016. The face value per share is * 10. Show the necessary journal entries with suitable narrations. Workings should form part of the

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