On January 1^st,20x9,GHI Inc

question 69

Essay

On January 1^st,20x9,GHI Inc.granted options to its twenty employees allowing for the purchase of 12,000 shares at $5 per share.The options vest evenly over the 3 years following the date of issue.The options are only exercisable as of December 31^st,20x11.The fair value of these options (using an Option Pricing model)is $30,000.
Part A: Assume that all options have vested but that none were exercised on December 31^st,20x11.Provide the required journal entry.
Part B: Assume that all options have vested and all were exercised on December 31^st,20x11.Provide the required journal entry.
Part C: Suppose that some of the options were forfeited by the employees.Actual and estimated forfeiture data are provided in the table below: Provide the required journal entries to record the accrual of compensation expense and the exercise of the options as per IFRS.
Part D: Suppose that some of the options were forfeited by the employees.Actual and estimated forfeiture data are provided in the table below:

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Definitions:

Fixed-ratio Schedule

A schedule of reinforcement where a response is reinforced only after a specified number of responses have been made.

Reinforcement

In behavioral psychology, a process in which a behavior is strengthened or made more likely to occur again by rewarding it or providing a positive stimulus.

Fixed Number

A quantity that remains constant and does not change or vary in a given context.

Varying Amounts

Different quantities or measures of something without a fixed or exact number.