Watermelon Corporation

On January 1, 2020, an entity granted 10,000 share options to employees. The share options vest on December 31,

2021 provided the employees remain in service until then. The fair value of the share option cannot be estimated

reliably. The par value per ordinary share is P10. The option price is P25 and the market value of the ordinary share

is also P35 at the date of grant. All share options vested on December 31, 2021 and no employees left the entity.

The share options can be exercised starting January 1, 2022 and expire two years after. All share options are

exercised on December 31, 2022. The share market prices are P53 on December 31, 2020, P88 on December 31,

2021 and P100 on December 31, 2022.

1. Compute for the compensation expense for 2020

2. Compute for the compensation expense for 2021

3. Compute for the increase in compensation expense for 2022