On 1 July 2021 Salt & Pepper Limited Granted 200

question 17

Multiple Choice

On 1 July 2021 Salt & Pepper Limited granted 200 share options to each of its 50 employees. Each grant is conditional on the employee working for the company for the next two years. The fair value of each option is estimated to be $8.00. Salt & Pepper estimates that 6% of its employees will leave during the two year period and therefore forfeit their rights to the share options. During the year ended 30 June 2022 five employees left. At this time the company revised its estimate of total employee departures over the full two-year period to 10%.
During the year ended 30 June 2023 a further 4 employees left.
The amount to be recognised as an expense by Salt & Pepper for the year ended 30 June 2022 is:

• A) $36 000.
• B) $72 000.
• C) $40 000.
• D) $80 000.

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Definitions:

Reducing

The process of decreasing the size, quantity, or extent of something.

Traction

The process of pulling; with fractures, traction is applied in a straight line to stretch the contracted muscles and permit realignment of the bone fragments.

Joint Membranes

Tissue layers surrounding joints, producing fluid that lubricates joint surfaces, facilitating smooth movement.

Rheumatoid Arthritis

An autoimmune disease characterized by chronic inflammation of the joints, leading to pain, swelling, and eventual destruction of joint integrity.