Blackburn Ltd Grants 50 Share Options to Each of Its

question 69

Multiple Choice

Blackburn Ltd grants 50 share options to each of its 150 employees on 1 July 2009.Each grant is conditional upon the employee working for the company for 3 years following the grant date.On grant date,the fair value of each option is estimated to be $12. Estimated value of the option for the year ending 2010,2011 and 2012 is $10,$13,$14 respectively.
Information on employee departures at the end of each year follows:
$$\begin{array} { | l | l | l | } \hline \text { Year ending 30 June } & \text { Actual departures } & \begin{array} { l } \text { Revised estimate of departures } \\\text { before option vests }\end{array} \\\hline 2010 & 7 & 22 \% \\\hline 2011 & 6 & 18 \% \\\hline 2012 & 4 & \text { NA } \\\hline\end{array}$$
What would be the appropriate journal entry to account for the share-based payment transaction for the year ending 30 June 2012?

• A)
• \[\begin{array} { | l | l | r | r | }
• \hline \mathrm { Dr } & \text { Employee benefits expense } & 25000 & \\
• \hline \mathrm { Cr } & \text { Share capital (equity) } & & 25000 \\
• \hline
• \end{array}\]
• B)
• \[\begin{array} { | l | l | r | r | }
• \hline \mathrm { Dr } & \text { Employee benefits expense } & 30600 & \\
• \hline \mathrm { Cr } & \text { Share capital (equity) } & & 30600 \\
• \hline
• \end{array}\]
• C)
• \[\begin{array} { | l | l | r | r | }
• \hline \mathrm { Dr } & \text { Employee benefits expense } & 33733 & \\
• \hline \mathrm { Cr } & \text { Share capital (equity) } & & 33733 \\
• \hline
• \end{array}\]
• D)
• \[\begin{array} { | l | l | r | r | }
• \hline \mathrm { Dr } & \text { Employee benefits expense } & 39800 & \\
• \hline \mathrm { Cr } & \text { Share capital (equity) } & & 39800 \\
• \hline
• \end{array}\]

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