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This is financial Accounting. please provide working details. thank you! On 1 July 2018, Titan Ltd granted 230 share options to each of its 400
This is financial Accounting. please provide working details. thank you!
On 1 July 2018, Titan Ltd granted | 230 | share options to each of its | 400 | employees. | |||||||
The options vest only if employees continuously provide services to Titan Ltd for a period of four years from the gran date. | |||||||||||
The exercise price of the options is $ | 6 | while the fair value was determined using an option pricing model | |||||||||
to be $ 3.90. Options can be excercised any time during the 12 months after the vesting period. | |||||||||||
On grant date, it was estimated that | 60 | employees will leave during the vesting period. However, by 30 June 2019, | |||||||||
20 | employees had left and Titan Ltd revised the estiamte of the total employees that would leave to be | 75 | . | ||||||||
Another | 9 | left during the yer ending 30 June 2020 and the estiamtes was further revised to a total of | 80 | . | |||||||
For the year ended 30 June 2021, a further | 12 | employees left and in the last year | 9 | left. | |||||||
During the least two years, the estimate remained unchanged. | |||||||||||
During the 12 months after the vesting date, the shapre price was $7.00 and | 310 | employees exercised | |||||||||
their rights to purcahse shares. At the end of the year, the balance of the options account which represented the unexercised options | |||||||||||
was transferred into a general reserve. | |||||||||||
Required: | |||||||||||
a) | Prepare journal entries to account for the share options granted by Titan Ltd for each of the five years | ||||||||||
in accordance with AASB 2. Show all your workdings. | 10 Marks | ||||||||||
b) | How would your answer to a) change if three more employees left on 31st December 2022? | ||||||||||
Provide your reasons. |
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