Detailed solution

PROBLEM 33-12 On January 1, 2018, Josh Company granted share options to 10 of its key employees entitling them to acquire P100 par value shares of the company at P110 per share. The share options will vest on December 31, 2020, provided that the employees remain in the company's employ and provided that revenues reach ? 100 million, the employees will receive 1,000 options each. If revenues reach P150 million, the employees will receive 2,000 options each. If revenues reach P200 million the employees will receive 3,000 options each. The market value of the option on the date of grant is 730. The company has a steady pattern of 25% increase in revenues every year over the last 5 years and expects the same pattern during the vesting period. In addition, the following information were deemed relevant for the computation of the Salaries expense for each year: Estimated number of Employees who will leave the Actual revenue earned company Dec 31, 2018 2 P80 million Dec 31, 2019 2 120 million Dec 31, 2020 38 200 million Actual number of employees who left the company. Questions: How much is the salaries expense to be recognized in 2018? P80,000 c. P180,000 P100.000 d. 7300.000 Date