CIMA Exam CIMAPRA19-F02-1 Topic 1 Question 79 Discussion

Actual exam question for CIMA's CIMAPRA19-F02-1 exam

Question #: 79
Topic #: 1

On 1 January 20X4 EF grants each of its 125 employees500 share options on the condition that they remain in employment for 3 years. During the year to 31 December 20X4 10 employees left and It is expected that a further 25 will leave before the end of the vesting period.

The fair value of each shareoption is $30 on 1 January 20X4 and $45 on 31 December 20X4.

What is the journal entry in respect of these share options in EF's financial statements for the year ended 31 December 20X4?

AOption A

BOption B

COption C

DOption D

Show Suggested Answer

Suggested Answer: A, B, C, D

by Audry at Dec 23, 2023, 07:34 PM

Limited Time Offer

25%

Off

Get Premium CIMAPRA19-F02-1 Questions as Interactive Web-Based Practice Test or PDF

Contribute your Thoughts:

Submit Cancel

Mila

So, we should debit the share option expense for the employees who left and credit the share option reserve.

upvoted 0 times

...

Lawanda

2 days ago

Yes, the journal entry should reflect the decrease in the number of employees eligible for the share options.

upvoted 0 times

...

Sanda

3 days ago

Ooh, I bet this is one of those 'calculate the expense' type questions. Time to pull out my accounting cheat sheet!

upvoted 0 times

...

Fannie

5 days ago

Haha, 'fair value' of share options? I guess they're trying to make us work for that one!

upvoted 0 times

...

Mila

7 days ago

I think we need to consider the impact of employees leaving on the share options.

upvoted 0 times

...

Norah

7 days ago

Wait, did they say 'vesting period'? I better make sure I understand how that affects the accounting treatment.

upvoted 0 times

...

Shanda

8 days ago

I agree. And we need to account for the change in fair value of the share options as well.

upvoted 0 times

...

Katheryn

8 days ago

Hmm, this question seems tricky. I'll need to carefully consider the details about the share options and the expected employee turnover.

upvoted 0 times

...

Lavina

10 days ago

Yes, we should also consider the number of employees who left and are expected to leave before the end of the vesting period.

upvoted 0 times

...

Shanda

16 days ago

I think we need to calculate the total number of share options granted first.

upvoted 0 times

...