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What amount of share premium will arise from the exercise

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Question - On January 1, 2020, Screw Corporation granted its employees options to purchase 5,000 shares of Screw's, P20 par value ordinary at P25 each. The option become exercisable on January 1, 2022. The option was exercised on March 15, 2022.

The market price of Screw's share capital were as follows:

January 1, 2020 P50

December 31,2020 60

December 31,2021 65

March 15, 2022 62

The company cannot reliably determine the fair value of the share option, so it decided to use the intrinsic value method

Required -

1. Amount of compensation expense for 2020 and 2021, respectively.

2. Amount of adjustment to equity in 2022 as a result of the change in the market price of the share from 65 to 62.

3. What amount of share premium will arise from the exercise of the share options on March 15, 2022?

4. What if in the above, only 90% of the share options were exercised, what amount of share premium-ordinary will arise from the exercise of the share options on March 15, 2022?

Reference no: EM132889366

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