Compensation expense for the stock option plan in 2021, 2022, 2023 are $210 millions, $96 million, $108 million.
Options granted 120 Millions
Multiply: Estimated fair value per option is $ 3
Total Compensation Expense is $ 360 Millions
Divided by: No. of years in vesting period (2021,2022 & 2023) 3 Years
Compensation expense for the stock option plan in 2021. is $ 120 Millions
- <u>Amounts are expressed in millions $.</u>
<u>Date </u> <u>General journal </u> <u>debit</u> <u>Credit </u>
31st Dec, 2021 Compensation expense $ 120
Paid in capital – stock options $ 120
- Percentage of option forfeited (100%-10%) = 90%
- Cumulative Compensation expense Up to Year 2022 (360*90%*2/3) = $ 216
Less: recognized in earlier year is $ 120
Compensation expense For Year 2022 is $ 96
Cumulative Compensation expense Up to Year 2023 (360*90%*3/3)
= $ 324
Less: recognized in earlier year is $ 216
Compensation expense For Year 2023 is $ 108
- <u>Amounts are expressed in millions $.</u>
<u> Date </u> <u>General journal </u> <u>debit </u> <u>Credit </u>
31st Dec, 2023 Compensation expense $ 96
Paid in capital – stock options $ 96
31st Dec, 2023 Compensation expense $ 108
Paid in capital – stock options $ 108
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