Bellata Ltd operates a share plan that grants each of its 100 employees a choice between receiving a cash payment equivalent to 200 shares or receiving 300 shares. The grant is conditional on the employee completing three years of service with Bellata Ltd. If the share alternative is chosen, the shares must be held for four years after vesting date. At the grant date, Bellata Ltds share price is $9 per share. At the end of years 1, 2 and 3, the share price is $11, $12 and $15, respectively. Bellata Ltd has no plan to issue dividends in the next three years. After taking into account the effect of the post-vesting transfer restriction, Bellata Ltd estimates that the fair value of the share alternative at grant date is $8 per share. Assume that no employees leave during the vesting period. Required: As a consultant to Bellata, prepare a schedule setting out the liability and equity amounts that Bellata Ltd must recognize. Show a comparison if all employees elect the share option versus if all employees elect the cash option. Share Option Cash Option