Reference no: EM132765815

Problem 1: On January 1, 20x1, ABC Co. grants 1,000 share options to each of its 100 key employees conditional upon each employee remaining in ABC's employ over the next three years. ABC estimates that the fair value of each share option is ?15.On the basis of a weighted average probability, ABC Co. estimates on January 1, 20x1 that 20 employees will leave during the three-year period and therefore forfeit their rights to the share options. During 20x1, 2 employees left. The entity revised its estimate of total employee departures over the three-year period from 20 to 15 employees. During 20x2, additional 3 employees left. The entity revised its estimate of total employee departures over the three-year period from 15 to 12 employees. During 20x3, additional 5 employees left. How much is the salaries expense on Dec. 31, 20x3?

a) 400,000
b) 425,000
c) 455,000
d) 470,000